Does the general release in the Carls Jr. Development Agreement include a release of claims arising from representations in the Franchise Disclosure Document?

According to the 2025 Carls Jr. Franchise Disclosure Document, the general release within the Development Agreement does not include a release of claims arising from representations made in the Franchise Disclosure Document (FDD). This means that franchisees retain the right to pursue claims against Carls Jr. based on information presented in the FDD, should that information prove to be inaccurate or misleading. This protection extends to claims arising under applicable state or federal franchise laws regulating the offer or sale of the franchise, including the FTC Rule on Franchising.

This provision is favorable for prospective Carls Jr. franchisees as it preserves their legal recourse regarding the accuracy and completeness of the information provided in the FDD. The FDD is a critical document for evaluating the franchise opportunity, and this clause ensures that Carls Jr. can be held accountable for the representations made within it. Franchisees are not waiving their rights to claims based on misrepresentations in the FDD.

It is important for prospective franchisees to carefully review the FDD and related documents with legal counsel to fully understand their rights and obligations. While this clause protects franchisees from unknowingly waiving claims related to FDD misrepresentations, it does not guarantee a successful outcome in any legal dispute. Franchisees must still demonstrate that the representations were indeed false or misleading and that they suffered damages as a result.