What representation does a Carls franchisee make to CJR regarding engagement in terrorist activity?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that under applicable U.S. law, including, without limitation, Executive Order 13224, signed on September 23, 2001 ("Order"), CJR is prohibited from engaging in any transaction with any person engaged in, or with a person aiding any person engaged in, acts of terrorism, as defined in the Order. Accordingly, Franchisee represents and warrants to CJR that as of the date of this Agreement, neither Franchisee nor any person holding any ownership interest in Franchisee, controlled by Franchisee, or under common control with Franchisee is designated under the Order as a person with whom business may not be transacted by CJR, and that Franchisee: (1) does not, and hereafter shall not, engage in any terrorist activity; (2) is not affiliated with and does not support any individual or entity engaged in, contemplating, or supporting terrorist activity; and (3) is not acquiring the rights granted under this Franchise Agreement with the intent to generate funds to channel to any individual or entity engaged in, contemplating, or supporting terrorist activity, or to otherwise support or further any terrorist activity.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, a franchisee must represent and warrant to CJR (Carls Jr. Restaurants LLC) that they are compliant with U.S. laws, including Executive Order 13224, which prohibits transactions with individuals or entities engaged in terrorist activities. This means that as of the date of the Franchise Agreement, neither the franchisee nor anyone holding an ownership interest in the franchisee, controlled by the franchisee, or under common control with the franchisee is designated under the Order as someone with whom Carls cannot do business.
The franchisee must also represent that they do not currently engage in any terrorist activity and will not do so in the future. Furthermore, they must affirm that they are not affiliated with or do not support any individual or entity involved in terrorist activities. This extends to not supporting anyone contemplating or supporting terrorist activity.
Finally, the franchisee must represent that they are not acquiring the franchise rights with the intention of generating funds to support any individual or entity engaged in, contemplating, or supporting terrorist activity, or to otherwise further any terrorist activity. This is a critical assurance Carls requires to comply with U.S. law and prevent any association with terrorism.