Under what condition might a Carls franchisee be directed to temporarily refrain from removing Proprietary Marks from the Franchised Restaurant after termination?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- E. Franchisee immediately shall discontinue all use of the Proprietary Marks in connection with the Franchised Restaurant and of any and all items bearing the Proprietary Marks; remove the Proprietary Marks from the Franchised Restaurant and from clothing, signs, materials, motor vehicles and other items owned or used by Franchisee in the operation of the Franchised Restaurant (unless CJR directs Franchisee to temporarily refrain from doing so while CJR determines if it will exercise its option under Section 23); cancel all advertising for the Franchised Restaurant that contains the Proprietary Marks (including telephone directory listings); and take such action as may be necessary to cancel any filings or registrations for the Franchised Restaurant that contain any Proprietary Marks.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to the 2024 Carls FDD, a franchisee may be directed to temporarily refrain from removing Proprietary Marks from the Franchised Restaurant after termination if Carls is determining whether it will exercise its option to purchase the franchise.
This means that upon termination of the franchise agreement, a franchisee is generally required to immediately discontinue all use of Carls' Proprietary Marks and remove them from the restaurant and all related items. However, Carls retains the right to evaluate whether it wants to purchase the franchise location.
During this evaluation period, Carls can instruct the franchisee to maintain the existing appearance of the franchised location, including leaving the Proprietary Marks in place. This allows Carls to assess the business without altering its established brand presence, and it prevents the franchisee from incurring unnecessary expenses for removing and then potentially reinstalling the marks if Carls decides to purchase the location. This decision is entirely at Carls' discretion.