For franchisees in California, does the Carls Jr. franchise agreement allow disclaiming reliance on statements made by the franchisor?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
I. FOR THE FOLLOWING STATES ONLY: CALIFORNIA, HAWAII, ILLINOIS, INDIANA, MARYLAND, MICHIGAN, MINNESOTA, NEW YORK, NORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, WISCONSIN
If Developer is a resident of one of the states listed in the heading of this Section 23.I (the "Applicable Franchise Registration State") or a non-resident who is acquiring franchise rights permitting the location of a 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 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the franchise agreement does not allow franchisees in California to disclaim reliance on statements made by the franchisor. Specifically, if a franchisee is a resident of California or a non-resident acquiring franchise rights for a Carls Jr. restaurant in California, any statement, questionnaire, or acknowledgment signed by the franchisee cannot waive claims under state franchise law, including fraud in the inducement.
This provision also ensures that franchisees in California cannot disclaim reliance on statements made by Carls Jr., its franchise sellers, or anyone acting on their behalf. This protects franchisees from being bound by clauses that might prevent them from pursuing legal action based on misrepresentations made during the franchise sales process.
This protection is significant for prospective Carls Jr. franchisees in California, as it ensures they retain their rights to claim fraud or misrepresentation, and it overrides any conflicting terms in the franchise agreement or related documents. This type of clause is common in franchise agreements to protect both the franchisor and franchisee and ensure fair dealing.