What law supersedes any inconsistent provision in the Carls Development Agreement if the offer or sale of a franchise was made in Wisconsin?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- 1. The provisions of this Addendum form an integral part of, and are incorporated into, the Development Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to Developer was made in the State of Wisconsin; (B) Developer is a resident of the State of Wisconsin; and/or (C) part or all of the Development Territory is located in the State of Wisconsin.
- 2. The Wisconsin Fair Dealership Law, Chapter 135, Stats., supersedes any provision of the Development Agreement inconsistent with that law.
- 3. The following paragraph is added to the end of Section 13.A.:
Section 135.04 of the Wisconsin Fair Dealership Law includes the requirement that, in certain circumstances, a franchisee receive 90 days' notice of termination, cancellation, non-renewal or substantial change in competitive circumstances. The notice shall state all the reasons for termination, cancellation, non-renewal or substantial change in competitive circumstances and shall provide that the franchisee has 60 days in which to rectify any claimed deficiency and shall supersede the requirements of paragraph 13.A. of the Development Agreement to the extent they may be inconsistent with the Law's requirements. If the deficiency is rectified within 60 days the notice shall be void. The above-notice provisions shall not apply if the reason for termination, cancellation or nonrenewal is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy. If the reason for termination, cancellation, nonrenewal or substantial change in competitive circumstances is nonpayment of sums due under the Development Agreement, Developer shall be entitled to written notice of such default, and shall have 10 days in which to remedy such default from the date of delivery or posting of such notice.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 FDD, if the offer or sale of a Carls franchise was made in Wisconsin, the Wisconsin Fair Dealership Law, Chapter 135, Stats., takes precedence over any conflicting terms within the Development Agreement. This means that certain provisions of the Development Agreement that are inconsistent with the Wisconsin Fair Dealership Law will not be enforceable.
Specifically, the FDD highlights Section 135.04 of the Wisconsin Fair Dealership Law, which mandates that franchisees, under certain conditions, must receive a 90-day notice of termination, cancellation, non-renewal, or substantial changes in competitive circumstances. This notice must detail all reasons for the action and allow the franchisee 60 days to rectify any claimed deficiency. This requirement supersedes the standard notice provisions in paragraph 13.A of the Development Agreement if those provisions are inconsistent with the law.
However, these notice provisions do not apply if the termination, cancellation, or non-renewal is due to insolvency, assignment for the benefit of creditors, or bankruptcy. In cases of nonpayment, the franchisee is entitled to written notice of the default and has 10 days to remedy the situation from the date the notice is delivered or posted. This addendum ensures that Carls complies with Wisconsin law, providing franchisees with additional protections and rights beyond those in the standard Development Agreement.