Which sections of the Carls Development Agreement are modified by this Addendum?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2. The following sentence is added to the end of Sections 10.B.(5) and 11:
Notwithstanding the foregoing, Developer will not be required to assent to a release, assignment, novation, or waiver that would relieve any person from liability imposed by Minnesota Statute §§ 80C.01 - 80C.22.
3. Section 12.B.(9) is deleted and replaced with the following statement:
Developer's use or duplication of the Carl's Jr. System or any part of the Carl's Jr. System in any other business, or disclosure of any part of the Carl's Jr. System to others for use or duplication in any other business, would constitute an unfair method of competition, for which CJR would be entitled to all legal and equitable remedies, including the right to seek injunctive relief.
4. The following sentence is added to the end of Section 13.A.:
With respect to franchises governed by Minnesota law, CJR will comply with Minnesota Statute § 80C.14, Subdivision 3, 4, and 5, which requires, except in certain cases, that a franchisee be given 90 days notice of termination (with 60 days to cure) and 180 days notice for non-renewal of the franchise agreements.
5. The following sentences are added to the end of Sections 22.A.-B.:
Minnesota Statute § 80C.21 and Minnesota Rule 2860.4400J prohibit CJR from requiring litigation to be conducted outside Minnesota. In addition, nothing in the disclosure document or agreements can abrogate or reduce any of Developer's rights as provided for in Minnesota Statutes, Chapter 80C, or Developer's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
6. The second sentence of Section 22.D. is deleted and replaced with the following sentence:
Developer and CJR waive, to the fullest extent permitted by law, the right to bring, or be a class member in, any class action suits.
7. The second sentence of Section 23.E. is deleted and replaced with the following sentence:
Therefore, Developer agrees that, in the event of a breach or threatened breach of any of the terms of this Agreement by Developer, CJR shall be entitled to seek injunctive relief (both preliminary and permanent) restraining that breach and/or to specific performance. A court will determine if a bond or security must be posted.
8. Section 24.M. is deleted.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 Carls FDD, the addendum modifies specific sections of the Development Agreement for franchisees in Minnesota. This addendum is executed because the franchise offer or sale was made in Minnesota, the developer is a Minnesota resident, or the development territory is in Minnesota.
The addendum adds a sentence to the end of Sections 10.B.(5) and 11, stating that the developer isn't required to assent to releases, assignments, novations, or waivers relieving liability imposed by Minnesota Statute §§ 80C.01 - 80C.22. Section 12.B.(9) is deleted and replaced, clarifying that the developer's use or duplication of the Carl's Jr. system in other businesses constitutes unfair competition, entitling CJR to legal and equitable remedies, including injunctive relief.
Additionally, a sentence is added to the end of Section 13.A., stating that CJR will comply with Minnesota Statute § 80C.14, Subdivisions 3, 4, and 5, regarding termination and non-renewal notices for franchises governed by Minnesota law. Sentences are added to the end of Sections 22.A.-B., referencing Minnesota Statute § 80C.21 and Minnesota Rule 2860.4400J, which prohibit CJR from requiring litigation outside Minnesota and protect the developer's rights under Minnesota Statutes, Chapter 80C. The second sentence of Section 22.D. is replaced, with both parties waiving the right to bring or be a class member in class action suits, to the fullest extent permitted by law. The second sentence of Section 23.E. is also replaced, allowing CJR to seek injunctive relief or specific performance in the event of a breach or threatened breach by the developer, with a court determining if a bond or security is required. Finally, Section 24.M. is deleted entirely.
These modifications ensure that the Development Agreement complies with Minnesota law and protects the franchisee's rights within the state. Prospective franchisees should carefully review these changes to understand their rights and obligations under the agreement when operating in Minnesota.