Which states are considered 'Applicable Franchise Registration States' for Carls franchisees according to the rider?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
FOR THE FOLLOWING STATES ONLY: CALIFORNIA, HAWAII, ILLINOIS, INDIANA, MARYLAND, MICHIGAN, MINNESOTA, NEW YORK, NORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, WISCONSIN
The following language is hereby added to the Franchise Disclosure Document if you are a resident of one of the states listed in the heading of this Rider (the "Applicable Franchise Registration State") or a non-resident who is acquiring franchise rights permitting the location of one or more Carl's Jr. Restaurants in the Applicable Franchise Registration State:
"No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise."
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 Carls FDD, the 'Applicable Franchise Registration States' are specifically defined for the purpose of a rider that modifies the standard franchise agreement. This rider applies only to franchisees who are residents of, or who will be operating a Carls Jr. restaurant in, one of the listed states.
The states included in this category are California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. The rider includes language that is added to the Franchise Disclosure Document, which states that no agreement signed by the franchisee can waive claims under state franchise law or disclaim reliance on statements made by Carls.
This is particularly important for prospective franchisees because it ensures that certain legal protections and rights under state franchise laws cannot be waived through standard contract clauses. It also reinforces that franchisees can rely on the information provided by Carls during the franchise sales process. Franchisees planning to operate in these states should pay close attention to this rider and understand how it modifies their rights and obligations under the franchise agreement.