For franchisees in Applicable Franchise Registration States, does the Carls Jr. franchise agreement supersede any state franchise law regarding reliance on statements made by the franchisor?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is a resident of one of the states listed in the heading of this Section 32.I (the "Applicable Franchise Registration State") or a non-resident who is acquiring franchise rights permitting the location of the Franchised Restaurant in the Applicable Franchise Registration State, then the following applies:
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any
statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, for franchisees who are residents of or are acquiring franchise rights in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin—defined as "Applicable Franchise Registration State"—the franchise agreement does not override state franchise laws regarding reliance on statements made by Carls Jr. or its representatives.
Specifically, no statement, questionnaire, or acknowledgment signed by the franchisee can waive claims under state franchise law, including claims of fraud, or disclaim reliance on statements made by Carls Jr., franchise sellers, or anyone acting on behalf of Carls Jr. This provision is designed to protect franchisees in these states by ensuring that they retain their rights under state franchise laws, regardless of any agreement terms that might suggest otherwise.
This clause in the Carls Jr. franchise agreement explicitly supersedes any other conflicting terms within any document executed in connection with the franchise. This means that even if other parts of the agreement seem to limit the franchisee's ability to claim reliance on statements made by Carls Jr., this provision takes precedence, reinforcing the franchisee's rights under applicable state laws.