Is Carls permitted to assign the Olo agreement to any third party?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.4. Assignment. Neither party may assign or transfer any part of this Agreement without the prior written consent of the other Party except that this Agreement may be assigned without consent: (a) to a person or entity who acquires all or substantially all of the assigning Party's assets, stock or business, and (b) to any affiliate or subsidiary of a Party; in each case, so long as the assignee accepts the obligations hereunder in writing. Any purported assignment of rights or obligations, except as expressly permitted herein, will be null and void. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties and their respective permitted successors and assigns.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the agreement with Olo contains specific stipulations regarding assignment. Carls, as the Operator, is generally prohibited from assigning the Olo agreement to any third party, and any such attempt would be considered void from the beginning. This restriction is in place to ensure that Olo maintains control over who utilizes their licensed applications and services.
However, there are exceptions to this rule. Carls may assign the agreement without Olo's prior written consent under two specific circumstances: (a) to a person or entity who acquires all or substantially all of Carls's assets, stock, or business, and (b) to any affiliate or subsidiary of Carls. In both scenarios, the assignee must accept the obligations of the agreement in writing to ensure they are bound by its terms.
These stipulations are typical in franchise agreements to protect the interests of all parties involved. The restrictions on assignment ensure that Olo knows who is using their platform and that the platform is not being used in ways they do not approve. The exceptions allow for business flexibility in the event of a sale or restructuring, provided the new entity agrees to abide by the original agreement's terms. This balance aims to provide stability while accommodating potential changes in Carls's business structure.