If a Carls Jr. franchisee is in monetary default, how many days do they have to cure the default?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Franchise | Summary | |
|---|---|---|---|
| Agreement | |||
| c. | Requirements for you to renew or extend d. Termination by you | Section 2.B. Not Applicable | In order to renew at the end of the Initial Term you must: give timely notice; sign general release; comply with training requirements; be in good standing; not be in default under any agreement with us and our affiliates; not be in default beyond the cure period under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or any agreement with any vendor or supplier to the Franchised Restaurant; have the right to remain in possession of the Franchised Location for the Renewal Term; remodel in accordance with our then-current standards; and pay a renewal fee. You must also sign our then-current form of Franchise Agreement, the terms of which likely will differ from your original Franchise Agreement, including, without limitation, those relating to royalty fees and advertising obligations. |
| e. | Termination by us without cause | Not Applicable | |
| f. | Termination by us with cause | Section 21 | We may terminate upon default, which includes, but is not limited to, remaining in default beyond any applicable cure period under any agreement with us or our affiliates, including any Development Agreement. |
| g. "Cause" defined– curable defaults | Section 21.B. | You have 10 days to cure monetary defaults. You have 30 days to cure all other defaults except those discussed in paragraph h. below. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 61–66)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee has a specific timeframe to correct a monetary default. If a franchisee fails to meet their financial obligations to Carls Jr., they are granted a 10-day period to resolve the outstanding payments or other financial issues that constitute the default.
This 10-day cure period is a critical opportunity for the franchisee to avoid termination of their franchise agreement. It allows them time to gather the necessary funds, negotiate a payment plan, or otherwise rectify the monetary default. Failure to cure the default within this timeframe can result in Carls Jr. initiating termination proceedings as per Section 21 of the Franchise Agreement.
It is important to note that this 10-day cure period applies specifically to monetary defaults. Other types of defaults, as outlined in Section 21.B of the Franchise Agreement, may have different cure periods or may not be curable at all. Franchisees should be aware of all potential default triggers and their corresponding cure provisions to ensure compliance with the franchise agreement and avoid potential termination.