Who is responsible for loss or damage arising from the development and operation of a Carls Franchised Restaurant?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee promptly shall inform CJR in writing as to any infringement of the Proprietary Marks of which it has knowledge. Franchisee shall not make any demand or serve any notice, orally or in writing, or institute any legal action or negotiate, compromise or settle any controversy with respect to any such infringement without first obtaining CJR's written approval. CJR shall have the right, but not the obligation, to bring such action or take such steps as it may deem advisable to prevent any such infringement and to join Franchisee as a party to any action in which CJR or CJR Affiliates are or may be a party and as to which Franchisee is or would be a necessary or proper party. Franchisee also shall promptly notify CJR of any litigation (including administrative or arbitration proceedings) of which Franchisee is aware instituted against CJR, CJR Affiliates or Franchisee relating to the Proprietary Marks. Franchisee shall execute any and all instruments and documents, render such other assistance and do any acts and things as may, in the opinion of counsel for CJR or CJR Affiliates, be necessary or advisable to protect and maintain the interests of CJR and CJR Affiliates in the Proprietary Marks, including without limitation their interests in litigation or proceedings before the U.S. Patent and Trademark Office or other tribunal relating to the Proprietary Marks.
15. INSURANCE
- A. Franchisee shall be responsible for all loss or damage arising from or related to Franchisee's development and operation of the Franchised Restaurant, and for all demands or claims with respect to any loss, liability, personal injury, death, property damage, or expense whatsoever occurring upon the premises of, or in connection with the development or operation of, the Franchised Restaurant. Franchise
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to the 2024 Carls Franchise Disclosure Document, the franchisee is responsible for all loss or damage arising from the development and operation of their franchised restaurant. This includes any demands or claims related to loss, liability, personal injury, death, property damage, or expenses occurring on the premises or in connection with the restaurant's development or operation.
To mitigate these risks, Carls requires franchisees to maintain insurance coverage throughout the term of the agreement. The specific types and amounts of insurance must meet the standards and specifications outlined in the OPM (Operations Procedures Manual) or as otherwise provided in writing by Carls. At a minimum, this includes commercial general liability insurance with policy limits of not less than $5,000,000 per occurrence and in the aggregate. This coverage must apply per location and include contractual liability, broad form property damage, personal and advertising injury, product liability, and completed operations, including food-borne illness. It also requires Damage to Rented Premises coverage with limits not less than $100,000.
Carls, and any entity they designate with an insurable interest, must be included as an additional insured in the franchisee's liability policies, with the exception of workers' compensation/employer's liability. They should also be listed as a loss payee for property to the extent each has an insurable interest. The insurance policies must be written by an insurance company or companies satisfactory to Carls.
This requirement ensures that franchisees are financially responsible for any incidents that may occur and that Carls is protected from potential liabilities related to the franchisee's operations. Prospective franchisees should carefully review the insurance requirements and factor the costs of maintaining adequate coverage into their business plan.