Under what condition will the provisions of the Carls Development Agreement addendum be effective?

According to the 2024 FDD, the provisions of the Development Agreement addendum for Carls will be effective only if the jurisdictional requirements of the relevant state's law are independently met, regardless of the addendum itself. This condition applies specifically to addenda executed for developers in Washington and Wisconsin.

For a prospective Carls developer, this means that the addendum's clauses modifying the Development Agreement are not automatically enforceable simply by being included in the document. The underlying state laws, such as the Washington Franchise Investment Protection Act or the Wisconsin Fair Dealership Law, must independently apply to the developer's situation. This could depend on factors like where the offer or sale of the franchise occurred, the developer's residency, or where the development territory is located.

This requirement ensures that Carls franchisees and developers receive the protections afforded to them by state laws. It prevents Carls from using the addendum to circumvent those protections unless the state law already applies. Therefore, a developer should confirm that they meet the jurisdictional requirements of the relevant state law to ensure the addendum's provisions are effective and enforceable.

It is important for potential Carls developers to seek legal counsel to determine whether the jurisdictional requirements are met in their specific case. This will help them understand the full scope of their rights and obligations under both the Development Agreement and the addendum.