Under what circumstances does the Wisconsin Addendum apply to the Carls Development Agreement?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 23: RECEIPTS]
- 1. The provisions of this Addendum form an integral part of, and are incorporated into, the Development Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to Developer was made in the State of Wisconsin; (B) Developer is a resident of the State of Wisconsin; and/or (C) part or all of the Development Territory is located in the State of Wisconsin.
- 2. The Wisconsin Fair Dealership Law, Chapter 135, Stats., supersedes any provision of the Development Agreement inconsistent with that law.
- 3. The following paragraph is added to the end of Section 13.A.:
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 13.A. of the Development 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 Development Agreement, Developer 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.
- 4. Any capitalized terms that are not defined in this Addendum shall have the meaning given them in the Development Agreement.
- 5. The provisions of this Addendum will be effective only to the extent that the jurisdictional requirements of the Wisconsin Fair Dealership Law are met independently of this Addendum.
- 6. Except as expressly modified by this Addendum, the Development Agreement remains unmodified and in full force and effect.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 Carls FDD, the Wisconsin Addendum becomes an integral part of the Development Agreement under specific conditions. This addendum is executed and incorporated into the Development Agreement if (A) the offer or sale of a Carls franchise to the developer was made in Wisconsin, (B) the developer is a resident of Wisconsin, or (C) any portion of the development territory is located within Wisconsin.
This addendum also acknowledges the Wisconsin Fair Dealership Law, Chapter 135, which supersedes any conflicting provisions within the Development Agreement. Specifically, it addresses termination, cancellation, non-renewal, or substantial changes in competitive circumstances, requiring Carls to provide the franchisee with a 90-day notice stating the reasons for such actions and allowing 60 days to rectify any deficiencies. However, these notice provisions do not apply in cases of insolvency, assignment for the benefit of creditors, or bankruptcy. For nonpayment of sums due, the developer is entitled to written notice and a 10-day period to remedy the default.
The Wisconsin Addendum's provisions are effective only to the extent that the jurisdictional requirements of the Wisconsin Fair Dealership Law are independently met. Except as expressly modified by the addendum, the original Development Agreement remains in full effect. This ensures that Carls franchisees in Wisconsin receive the protections afforded by Wisconsin law while adhering to the broader terms of the Development Agreement.