Who must execute a general release and covenant not to sue for a Carls Jr. franchise renewal?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) Franchisee, all individuals who executed this Agreement and all guarantors of Franchisee's obligations shall have executed a general release and a covenant not to sue, in a form satisfactory to CJR, of any and all claims against CJR and its affiliates and their respective past and present officers, directors, managers, shareholders, members, agents and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and claims arising out of, or relating to, this Agreement, any other agreements between Franchisee and CJR or its affiliates and Franchisee's operation of the Franchised Restaurant, other Carl's Jr.
Restaurants operated by Franchisee and all other restaurants operated by Franchisee that are franchised by CJR or its affiliates.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, to renew a franchise agreement, the franchisee, all individuals who initially executed the agreement, and all guarantors of the franchisee's obligations must execute a general release and a covenant not to sue. This release must be in a form satisfactory to CJR. It covers any and all claims against CJR, its affiliates, and their respective past and present officers, directors, managers, shareholders, members, agents, and employees, in their corporate and individual capacities. This includes, but is not limited to, claims arising under federal, state, and local laws, rules, and ordinances.
This requirement extends to claims arising out of or relating to the franchise agreement itself, any other agreements between the franchisee and CJR or its affiliates, and the franchisee's operation of the franchised restaurant. It also encompasses other Carls Jr. restaurants operated by the franchisee and all other restaurants operated by the franchisee that are franchised by CJR or its affiliates.
In practical terms, this means that before a Carls Jr. franchise can be renewed, the franchisee and all related parties with obligations or prior involvement must waive their rights to pursue any legal claims against the franchisor. This is a significant condition for renewal and prospective franchisees should carefully consider its implications, including consulting with legal counsel, before entering into a franchise agreement or deciding to renew.