In which locations can Carls Jr. file a lawsuit against a licensee?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties agree that, to the extent any disputes cannot be resolved directly between them, Licensee shall file any suit against Licensor only in the federal or state court having jurisdiction where Licensor's principal offices are located at the time suit is filed.
Licensor shall file suit in the federal or state court located in the jurisdiction where its principal offices are located at the time suit is tiled, in the jurisdiction where Licensee resides or does business, where any Franchised Restaurant is or was located, or where the claim arose.
Licensee consents to the personal jurisdiction of those courts over Licensee and venue in those courts.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 FDD, Carls Jr. can file a lawsuit against a licensee in specific jurisdictions if disputes arise that cannot be resolved directly. The legal action can be initiated in the federal or state court located in the jurisdiction where Carls Jr.'s principal offices are located at the time the suit is filed. Alternatively, Carls Jr. can file suit in the jurisdiction where the licensee resides or conducts business.
Additionally, Carls Jr. has the option to file a lawsuit in the jurisdiction where any franchised restaurant is or was located, or where the claim that led to the lawsuit originated. The licensee, by agreeing to the franchise terms, consents to the personal jurisdiction of these courts, meaning they agree to be subject to legal proceedings in those locations and to the venue, which is the specific court within that jurisdiction where the case will be heard.
This clause is important for prospective franchisees as it clarifies where they might face legal action from Carls Jr., potentially adding costs and inconvenience if a dispute arises far from their primary place of business. Franchisees should consider these factors when evaluating the franchise agreement and the potential legal implications of operating a Carls Jr. franchise.