Does Carls require Developer consent for CJR to transfer its rights and obligations under the Development Agreement?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
CJR shall have the absolute, unrestricted right, exercisable at any time, to transfer and assign all or any part of its rights and obligations under this Agreement to any person or legal entity without the consent of Developer. Developer agrees that CJR will have no liability after the effective date of transfer or assignment for the performance of, or any failure to perform, any obligations transferred.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, Carls, referred to as CJR in the document, has the unrestricted right to transfer its rights and obligations under the Development Agreement without obtaining consent from the Developer. The document states that CJR can transfer all or any part of its rights and obligations to any person or legal entity at any time without the Developer's approval.
This provision is significant for prospective Carls developers as it clarifies that Carls retains full control over the transfer of its own obligations. Developers cannot prevent Carls from assigning the agreement to another party.
The FDD also specifies that Carls will not be liable after the effective date of the transfer for any obligations that have been transferred. This means that once the transfer is complete, the new entity assumes all responsibilities, and Carls is released from any further obligations related to the transferred rights. This clause protects Carls from long-term liabilities associated with the Development Agreement after it has been transferred.