Does the general release in the Carls Jr. franchise agreement include a release of claims arising from representations made in the Carl's Jr. Franchise Disclosure Document?

According to the 2025 Carls Jr. Franchise Disclosure Document, the general release in the franchise agreement does not include a release of claims arising from representations made in the Carl's Jr. Franchise Disclosure Document (FDD). The release also does not include claims arising under any applicable state or federal franchise laws regulating the offer or sale of the franchise, including the FTC Rule on Franchising. This means that franchisees retain their rights to pursue claims based on misrepresentations or violations of franchise laws, even after signing the general release.

This provision protects franchisees by ensuring they do not inadvertently waive their legal rights related to the information provided in the FDD or by franchise laws. The FDD is a critical document for prospective franchisees, containing important information about the franchise system, fees, obligations, and potential risks. Franchise laws are in place to protect franchisees from unfair or deceptive practices by franchisors.

However, for franchisees residing in or planning to operate in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin, additional protections apply. In these states, no statement, questionnaire, or acknowledgment can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on any statement made by the franchisor or its representatives. This provision further strengthens franchisee rights in these specific states.

Prospective Carls Jr. franchisees should carefully review the franchise agreement and FDD with legal counsel to fully understand their rights and obligations. It is important to be aware of the specific protections afforded by franchise laws and to ensure that any representations made by the franchisor are accurate and reliable. Franchisees should also consider the implications of the general release and the exceptions to it, particularly in states with franchise-specific regulations.