Does the Carls Jr. agreement allow the Licensee to transfer the license to a third party?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
3.1. License. Subject to the terms and conditions of the Agreement and the applicable Addendums, Olo hereby grants to Operator, during the Term, a non-exclusive, nonsublicensable (except as permitted hereunder), non-transferable (except pursuant to Section 10.4) license to access and use for itself and its End Users, the specific Licensed Applications selected in the applicable Customer Order Form. Operator shall not (a) assign this Agreement to any third party (it being understood that any such assignment shall be void ab initio); or (b) transfer, sell, or assign the right to use the Licensed Applications, including for the avoidance of doubt to any Customer Third Party Provider (except pursuant to Section 10.4).
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the standard license agreement does not generally allow for the transfer of the license to a third party. Specifically, the license granted to the operator is non-exclusive and non-transferable, meaning the franchisee cannot transfer the rights to use the licensed applications to another party.
However, there is an exception mentioned in Section 10.4 of the agreement, which may permit transfer under certain circumstances. It is important to note that any attempt to assign the agreement to a third party without adhering to Section 10.4 would be considered void from the beginning.
This restriction is typical in franchising, as franchisors like Carls Jr. need to carefully control who operates under their brand to maintain quality and consistency. A prospective franchisee should carefully review Section 10.4 of the franchise agreement and discuss with Carls Jr. the conditions under which a transfer might be permitted, as well as any potential fees or requirements associated with such a transfer.