Must a Carls Jr. franchisee sign a general release to renew their franchise agreement?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
----------|--------------------------------------|------------------------------------------------------------------------------| | a. | Length of the franchise term | Section 2.A. | 20 years from the date the Franchised Restaurant opens for business. | | | b. Renewal or extension of the term | Section 2.B. | You can renew for a Renewal Term of 10 years or, at your option, 5 years. |
| Provision | Franchise | Summary | |
|---|---|---|---|
| Agreement | |||
| c. | Requirements for you to renew or extend d. Termination by you | Section 2.B. Not Applicable | In order to renew at the end of the Initial Term you must: give timely notice; sign general release; comply with training requirements; be in good standing; not be in default under any agreement with us and our affiliates; not be in default beyond the cure period under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or any agreement with any vendor or supplier to the Franchised Restaurant; have the right to remain in possession of the Franchised Location for the Renewal Term; remodel in accordance with our then-current standards; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 61–66)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee must sign a general release to renew their franchise agreement. Specifically, to renew the franchise at the end of the initial term, the franchisee must give timely notice and sign a general release as stated in Section 2.B. of the Franchise Agreement.
In addition to signing a general release, the franchisee must meet other requirements to be eligible for renewal. These include complying with training requirements, being in good standing, and not being in default under any agreement with Carls Jr. or its affiliates. The franchisee must also not be in default beyond the cure period under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or any agreement with any vendor or supplier to the Franchised Restaurant.
Furthermore, the franchisee must have the right to remain in possession of the Franchised Location for the Renewal Term and remodel in accordance with Carls Jr.'s then-current standards. They must also pay a renewal fee. It is important to note that the franchisee must sign the then-current form of Franchise Agreement, which may differ from the original agreement, potentially including changes to royalty fees and advertising obligations.