Does the Carls Jr. franchise agreement allow for consequential, punitive, or exemplary damages in disputes?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
liabilities and causes of action of whatever kind or nature, whether known or unknown, vested or contingent, suspected or unsuspected (collectively "claims"), which any Releasor now owns or holds or may in the future own or hold based on, arising out of or relating to, in whole or in part, any fact, event, conduct or omission occurring on or before the date of this Agreement, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, claims for contribution, indemnity and/or subrogation and claims arising out of, or relating to this Agreement and all other agreements between any Releasor and any CJR Releasee, the sale of a franchise to any Releasor, the development of the Franchised Restaurant prior to the date of this Agreement and the development and operation of all other restaurants operated by any Releasor that are or were franchised by CJR or its parents, subsidiaries, affiliates or predecessors. Franchisee (on behalf of Releasors) expressly agrees that fair consideration has been given by CJR for this release and it fully understands that this is a negotiated, complete and final release of all claims. This release does not include a release of claims arising from representations in the Carl's Jr. Franchise Disclosure Document provided to Franchisee in connection with this Agreement or any claims arising under any applicable state or federal franchise laws regulating the offer or sale of the franchise for this Agreement (including without limitation the FTC Rule on Franchising (16 C.F.R. Part 436)).
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
Based on the 2025 Carls Jr. Franchise Disclosure Document, the excerpts provided do not explicitly address whether the franchise agreement allows for consequential, punitive, or exemplary damages in disputes. The document does outline governing law, forum, and limitations, stating that the agreement is governed by Tennessee law, and specifies where lawsuits against Carls Jr. must be filed.
However, the franchise agreement includes a general release of claims. This release requires franchisees to waive any and all known or unknown claims against Carls Jr., its affiliates, and their respective officers, directors, managers, shareholders, members, agents, and employees. This release covers a broad range of potential claims, including those arising under federal, state, and local laws, as well as those related to the franchise agreement itself.
The release does contain an exception for claims arising from misrepresentations in the Franchise Disclosure Document or claims arising under franchise laws. Because the excerpts do not specifically address the availability of consequential, punitive, or exemplary damages, prospective franchisees should seek clarification from Carls Jr. regarding this issue and consult with legal counsel to fully understand their rights and obligations under the franchise agreement.