Does the Carls Jr. franchise agreement allow franchisees to disclaim reliance on statements made by the franchisor or its representatives?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
LLC ("CJR") and ("Franchisee") is entered into simultaneously with the execution of the Franchise Agreement. 1. The provisions of this Addendum form an integral part of, and are incorporated into the Franchise Agreement. This Addendum is being executed because: (A) the offer or sale of the franchise to Franchisee was made in the State of California; (B) Franchisee is a resident of the State of California; and/or (C) the Restaurant will be located or operated in the State of California. 2. The following sentences are added immediately before the last sentence of Section 16: Franchisee (on behalf of all Releasors) and all guarantors also expressly agree that, with respect to this release, any and all rights granted under Section 1542 of the California Civil Code are expressly waived. That Section reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release which if known by him must have materially affected his settlement with the debtor." 3. the Franchise Agreement. Any capitalized terms that are not defined in this Addendum shall have the meaning given them in 4. and in full force and effect.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the franchise agreement includes addenda for franchisees in specific states that address waivers and releases. In California, both the Franchise Agreement and the Development Agreement include clauses where franchisees and guarantors waive rights granted under Section 1542 of the California Civil Code. This section states that a general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.
For Minnesota, the Development Agreement states that developers will not be required to assent to a release, assignment, novation, or waiver that would relieve any person from liability imposed by Minnesota Statute §§ 80C.01 - 80C.22. Additionally, Minnesota Statutes prohibit Carls Jr. from requiring litigation to be conducted outside Minnesota, and nothing in the disclosure document or agreements can abrogate or reduce any of the Developer's rights as provided for in Minnesota Statutes, Chapter 80C, or Developer's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
These stipulations suggest that Carls Jr.'s franchise agreements may contain clauses that require franchisees to disclaim reliance on certain statements, but these clauses are subject to state laws that may limit or prohibit such disclaimers. Prospective franchisees should carefully review the specific addenda applicable to their state and consult with legal counsel to understand the full implications of these waivers and releases.