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Which sections of the Carls Franchise Agreement have a paragraph added to the end, as mentioned in Item 23?

Carls Franchise · 2024 FDD

Answer 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.

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.

2. The following sentence is added to the end of Sections 2.B.(2)(e), 15.B.(5) and 16:

Notwithstanding the foregoing, Franchisee 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. The following sentence is added to the end of Sections 2.B. and 18:

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 franchise agreements.

4. The following sentence is added at the end of Section 11:

Notwithstanding the foregoing, CJR will indemnify Franchisee against liability to a third party resulting from claims that Franchisee's use of a Proprietary Mark infringes trademark rights of a third party; provided, that CJR will not indemnify against the consequences of Franchisee's use of the Proprietary Marks unless the use is in accordance with the requirements of this Agreement and the System.

3. The following paragraph is added to the end of Sections 2.B. and 18:

Section 135.04 of the Wisconsin Fair Dealership Law includes the requirement that, in certain circumstances, a franchisee receive 90 days' notice of termination, cancellation, non-renewal or substantial change in competitive circumstances. The notice shall state all the reasons for termination, cancellation, non-renewal or substantial change in competitive circumstances and shall provide that the franchisee has 60 days in which to rectify any claimed deficiency and shall supersede the requirements of paragraph 18 of the Franchise Agreement to the extent they may be inconsistent with the Law's requirements. If the deficiency is rectified within 60 days the notice shall be void. The above-notice provisions shall not apply if the reason for termination, cancellation or nonrenewal is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy. If the reason for termination, cancellation, nonrenewal or substantial change in competitive circumstances is nonpayment of sums due under the Franchise Agreement, Franchisee shall be entitled to written notice of such default, and shall have 10 days in which to remedy such default from the date of delivery or posting of such notice.

Source: Item 23 — RECEIPTS (FDD pages 80–480)

What This Means (2024 FDD)

According to the 2024 Carls FDD, Item 23 discusses addenda to the franchise agreement that address specific state laws. For franchisees in Minnesota, a sentence is added to the end of Sections 10.B.(5) and 11, which states that the franchisee is not required to relieve any person from liability imposed by Minnesota Statute §§ 80C.01 - 80C.22. Also for Minnesota franchisees, a sentence is added to the end of Section 13.A, stating that Carls will comply with Minnesota Statute § 80C.14, Subdivision 3, 4, and 5, regarding notice of termination and non-renewal of franchise agreements. Finally, for Minnesota franchisees, sentences are added to the end of Sections 22.A.-B., stating that Carls cannot require litigation to be conducted outside Minnesota and that the disclosure document or agreements cannot reduce any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C.

For franchisees in Minnesota, a sentence is added to the end of Sections 2.B.(2)(e), 15.B.(5) and 16, stating that the franchisee will not be required to relieve any person from liability imposed by Minnesota Statute §§ 80C.01 - 80C.22. Also for Minnesota franchisees, a sentence is added to the end of Sections 2.B. and 18, stating that Carls will comply with Minnesota Statute § 80C.14, Subdivision 3, 4, and 5, regarding notice of termination and non-renewal of franchise agreements. In addition, for Minnesota franchisees, a sentence is added at the end of Section 11, stating that Carls will indemnify the franchisee against liability to a third party resulting from claims that the franchisee's use of a Proprietary Mark infringes trademark rights of a third party.

For franchisees in Wisconsin, a paragraph is added to the end of Sections 2.B. and 18. This paragraph states that Section 135.04 of the Wisconsin Fair Dealership Law requires that a franchisee receive 90 days' notice of termination, cancellation, non-renewal or substantial change in competitive circumstances in certain situations. The notice must state all the reasons for such actions and provide that the franchisee has 60 days to rectify any claimed deficiency. The paragraph also states that if the reason for termination, cancellation, nonrenewal or substantial change in competitive circumstances is nonpayment of sums due under the Franchise Agreement, the franchisee will be entitled to written notice of such default and will have 10 days to remedy such default.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.