What is the cure period allowed for a material breach of the agreement before Carls Jr. can terminate the agreement?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- (13) Developer fails or refuses to comply with any other provision of this Agreement or any requirement of the Carl's Jr.
System and does not correct the failure or refusal within 30 days (10 days for monetary defaults) after receiving written notice of default.
Except for monetary defaults, if the default cannot be corrected within 30 days, Developer shall have such additional time to correct the default as reasonably required (not to exceed 90 days) provided that Developer begins taking the actions necessary
to correct the default during the 30-day cure period and diligently and in good faith pursues those actions to completion. Developer will be in default under this Section 13.A.(13) for any failure to materially comply with any of the requirements imposed by this Agreement, the Development Guide or otherwise in writing, or to carry out the terms of this Agreement in good faith.
If Developer has received 2 or more notices of default pursuant to this Section 13.A.(13) within the previous 12 months, CJR shall be entitled to send Developer a notice of termination upon Developer's next default under this Section 13.A.(13) in that 12-month period without providing Developer an opportunity to remedy that default.
B. Statutory Limitations
If any valid, applicable law or regulation of a competent governmental authority with jurisdiction over this Agreement requires a notice or cure period prior to termination longer than set forth in this Section, this Agreement will be deemed amended to conform to the minimum notice or cure period required by the applicable law or regulation.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee typically has 30 days to correct a failure or refusal to comply with any provision of the agreement. However, for monetary defaults, the cure period is only 10 days.
If the default, excluding monetary defaults, cannot be corrected within the initial 30-day period, the franchisee may be granted additional time, not exceeding 90 days, to correct the default. This extension is contingent upon the franchisee beginning to take necessary corrective actions during the initial 30-day cure period and diligently pursuing those actions to completion.
However, if a franchisee receives two or more default notices within a 12-month period, Carls Jr. reserves the right to send a notice of termination upon the franchisee's next default within that same 12-month period, without offering an opportunity to remedy the default. Furthermore, any valid, applicable law or regulation may require a longer notice or cure period than what is outlined in the franchise agreement, which would then take precedence.