Under what circumstances is Carls not responsible for any loss of business, loss of profit, or other financial loss by the franchisee?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
CKR HAVE NO LIABILITY TO FRANCHISEE FOR CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF THOSE DAMAGES. CKR WILL NOT BE RESPONSIBLE FOR ANY LOSS OF BUSINESS, LOSS OF PROFIT OR OTHER FINANCIAL LOSS BY FRANCHISEE DURING THE PERIOD IN WHICH THE LICENSED PRODUCTS ARE INOPERATIVE, NOR WILL CKR BE RESPONSIBLE FOR ANY LOSS OR INACCURACY OF DATA CAUSED BY THE LICENSED PRODUCTS.
- 8.3 Force Majeure. CKR shall not be liable for any loss or damage due to: (a) delays caused by any act of God, strike, lock-out or other industrial disturbance, war (declared or undeclared), riot, epidemic, fire or other catastrophe, act of any government or other third party; (b) food spoilage or loss of business; or (c) any other cause not within its control.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, Carls will not be held responsible for any loss of business, loss of profit, or other financial loss incurred by the franchisee during periods when the licensed products are inoperative. Additionally, Carls is not responsible for any loss or inaccuracy of data caused by the licensed products. This limitation of liability applies even if Carls has been advised of the possibility of such damages.
Furthermore, Carls is not liable for any loss or damage due to delays caused by acts of God, strikes, lock-outs, industrial disturbances, war, riots, epidemics, fire, catastrophes, or actions by government or other third parties. This also extends to food spoilage or loss of business resulting from causes beyond Carls's control.
This limitation of liability is a significant aspect of the franchise agreement, as it allocates certain risks to the franchisee. Prospective franchisees should carefully consider these limitations and how they might impact their business operations. It is common in franchise agreements to include clauses that limit the franchisor's liability to some extent, but the specific terms can vary widely. Franchisees should consult with legal counsel to fully understand their rights and obligations under the agreement.