Does the general release in the Carls Jr. agreement include the sale of a franchise to any Releasor?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as set forth at the end of this Section 3, each Guarantor (if an individual, on behalf of him/herself and his/her heirs, representatives, successors and assigns, and if a business entity, on behalf of itself and its parent, subsidiaries and affiliates) (each a "Releasor" and collectively, "Releasors"), freely and without any influence forever releases and covenants not to sue CJR, its parents, subsidiaries, affiliates, predecessors and successors and their respective past and present officers, directors, managers, shareholders, members, agents and employees, in their corporate and individual capacities (collectively, "CJR Releasees"), from any and all claims, demands, 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 Guarantee, 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 the Agreement and all other agreements between any Releasor and any CJR Releasee, the sale of a franchise to any Releasor, the development of any Franchised Restaurant 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.
Each Guarantor (on behalf of the applicable 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 any Releasor in connection with the Agreement or any claims arising under any applicable state or federal franchise laws regulating the offer or sale of the franchise for the Agreement as of the date of the Agreement (including without limitation the FTC Rule on Franchising (16 C.F.R.
Part 436).
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the general release includes claims relating to the sale of a franchise to any Releasor. This means that by signing the release, the Releasor gives up their rights to sue Carls Jr. regarding any issues related to the franchise sale.
The Releasor, which includes the guarantor and their associated entities, agrees to release Carls Jr. from all claims and liabilities, whether known or unknown, that may arise from events occurring on or before the date of the guarantee. This encompasses claims under federal, state, and local laws, as well as those related to the franchise agreement, the development of franchised restaurants, and the operation of other restaurants franchised by Carls Jr.
However, the release does not extend to claims arising from representations made in the Franchise Disclosure Document itself or claims arising under franchise laws regulating the offer or sale of the franchise. This exception protects the franchisee's right to pursue legal action if Carls Jr. made misrepresentations in the FDD or violated franchise laws during the sale process. This is a fairly standard exception in franchise agreements, as it protects franchisees from deceptive practices while still providing the franchisor with a broad release from other potential claims.