Under what circumstances is the Addendum to the Development Agreement for a Carls franchise executed?

According to the 2024 Carls FDD, the Addendum to the Development Agreement is executed under specific circumstances related to the location and residency of the developer. Specifically, the addendum is integrated into the Development Agreement if the offer or sale of the franchise was made in a particular state, if the developer is a resident of that state, or if any part of the development territory is located in that state. These states include Washington, Wisconsin, and Minnesota.

For prospective Carls developers, this means that the terms of their Development Agreement may be modified by a state-specific addendum to ensure compliance with local franchise laws. The addendum addresses specific legal requirements and statutes within those states, potentially altering the standard terms of the Development Agreement.

For example, the Minnesota addendum includes stipulations regarding required notices of termination and non-renewal, as well as prohibitions against mandatory out-of-state litigation. The Wisconsin addendum states that the Wisconsin Fair Dealership Law supersedes any conflicting provision in the Development Agreement and outlines specific notice requirements for termination, cancellation, or non-renewal. The Washington addendum mentions the Washington Franchise Investment Protection Act, which may supersede the agreement in areas like termination and renewal.

It is important for prospective Carls developers to carefully review any state-specific addenda to understand how local laws may impact their rights and obligations under the Development Agreement. This ensures they are fully aware of any modifications to the standard agreement and can operate their franchise in compliance with state regulations.