How long is the term of the Agreement for each Carls Franchised Restaurant?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
7.1 Term. The term of this Agreement shall, with respect to each Franchised Restaurant, be coextensive with the term of the applicable Franchise Agreement.
- 7.2 Termination. This Agreement shall, with respect to each Franchised Restaurant, terminate simultaneously with the termination or expiration of the Franchise Agreement between Franchisee and Franchisor for that Franchised Restaurant. Either party may terminate this Agreement by providing 60 days' prior written notice to the other; provided, however, that CKR may terminate this Agreement, without prejudice to any other remedy CKR may have, immediately without further obligation to Franchisee in the event of: (a) any breach by Franchisee of any material provision of this Agreement which breach is not or cannot be remedied within 24 hours of CKR's notice to Franchisee; or (b) any assignment by Franchisee for the benefit of its creditors, the filing under any voluntary bankruptcy or insolvency law, under the reorganization or arrangement provisions of the United States Bankruptcy Code, or under the provisions of any law of like import in connection with Franchisee, or the appointment of a trustee or receiver for Franchisee or its property.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 FDD, the term of the agreement for each Carls Jr. Franchised Restaurant is coextensive with the term of the applicable Franchise Agreement. This means that the length of the agreement is directly tied to how long the Franchise Agreement lasts.
This also means that when the Franchise Agreement terminates or expires for a specific restaurant, the agreement in question also ends simultaneously. This linkage ensures that the agreement remains valid only as long as the franchisee is authorized to operate the Carls Jr. restaurant under the Franchise Agreement.
Carls or the franchisee can terminate the agreement with 60 days prior written notice. However, Carls has the right to terminate the agreement immediately if the franchisee breaches any material provision of the agreement and fails to remedy the breach within 24 hours of notice, or if the franchisee becomes involved in bankruptcy or insolvency proceedings.