Under what circumstances can the license agreement for the Licensed Program and Content at Carls be terminated before its natural expiration?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.1 Term. Unless this Agreement is terminated by its terms, the term of this Agreement commences on the Effective Date and remains in force until the earlier of: (a) for each Franchised Restaurant, the termination or expiration of the respective Franchise Agreement; or (b) Licensor's determination, in its sole discretion, to require Licensee to license from Licensor or a third-party provider the same or different licensed program and/or content under then-applicable terms. If Licensor loses the right to provide Licensee access to the Licensed Program, then this Agreement shall be amended or terminated as necessary. In addition, Licensee shall have the right to terminate this Agreement for any reason and at any time by providing Licensor with 60 days written notice of its intent to cease using the Licensed Program and Content.
- 8.2 Cessation of Use. Upon termination of this Agreement, Licensor will disconnect Licensee from the Licensed Program and Content and deactivate passwords, as applicable. Licensee shall cease using the Licensed Program and Content and promptly return to Licensor all copies of all such materials and all other Confidential Information in its possession or control. Licensee shall delete all copies of such materials residing in on-line or off-line computer memory, and destroy all copies of such materials that also incorporate Confidential Information. Licensor shall be entitled to enter the Franchised Restaurants to repossess and remove the Licensed Program and Content, and any other Confidential Information. Licensee shall, within 5 days from the effective date of the termination, certify to Licensor, in writing by an officer or director, that all copies of the Licensed Program and Content have been returned, deleted or destroyed. In the event of termination of the License granted by this Agreement for fewer than all Franchised Restaurants, Licensee shall comply with the foregoing with respect to the applicable Franchised Restaurants. Notwithstanding forgoing, upon request Licensee shall have the right to receive from Licensor such readily accessible reports or information containing data of Licensee's completed training modules (or other available data) with the understanding that Licensor shall not have the right to incur any additional expenses to provide such data to Licensee.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the license agreement for the Licensed Program and Content can be terminated under several circumstances. The agreement remains in force until the termination or expiration of the Franchise Agreement for each franchised restaurant. Additionally, Carls (referred to as Licensor in this context) has the discretion to require the franchisee (Licensee) to license a different program or content under new terms, which could lead to termination of the existing agreement. If Carls loses the right to provide access to the Licensed Program, the agreement will be amended or terminated as necessary.
A franchisee can also terminate the agreement at any time, for any reason, by providing Carls with 60 days' written notice of their intent to stop using the Licensed Program and Content. Upon termination, the franchisee must cease using the Licensed Program and Content, return all copies of materials and confidential information, and delete all digital copies. Carls is entitled to enter the franchised restaurants to repossess and remove the Licensed Program and Content.
Within 5 days of termination, the franchisee must certify in writing that all copies of the Licensed Program and Content have been returned, deleted, or destroyed. If the termination applies to fewer than all franchised restaurants, the franchisee must comply with these requirements for the applicable restaurants. However, the franchisee has the right to request readily accessible reports or information containing data of completed training modules, without Carls incurring additional expenses to provide such data.