What notice of demand for payment does each of the undersigned waive regarding the Carls Jr. agreement?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Each of the undersigned waives: (1) acceptance and notice of acceptance by CJR of the foregoing undertakings; (2) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed; (3) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (4) any right he may have to require that an action be brought against Developer or any other person as a condition of liability; (5) all rights to payments and claims for reimbursement or subrogation which any of the undersigned may have against Developer arising as a result of the execution of and performance under this Guarantee by the undersigned; (6) any law or statute which requires that CJR make demand upon, assert claims against or collect from Developer or any others, foreclose any security interest, sell collateral, exhaust any remedies or take any other action against Developer or any others prior to making any demand upon, collecting from or taking any action against the undersigned with respect to this Guarantee; (7) any and all other notices and legal or equitable defenses to which he may be entitled; and (8) any and all right to have any legal action under this Guarantee decided by a jury.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, each party signing the guarantee waives the right to receive notice of demand for payment regarding any debt or unfulfilled obligations that are guaranteed. This means that Carls Jr. is not required to formally notify the guarantor that payment or performance is due before taking action to collect on the guarantee.
This waiver is part of a broader set of waivers that include acceptance of the guarantee, notice of default, and the right to require Carls Jr. to pursue action against the developer (franchisee) first. The guarantor also relinquishes rights to reimbursement or subrogation claims against the developer and any legal or equitable defenses they might have.
For a prospective Carls Jr. franchisee, this signifies that anyone acting as a guarantor for their obligations to Carls Jr. is taking on a significant risk. They are giving up important rights and protections that would normally be in place to ensure they are informed and have recourse in the event of a default by the franchisee. It is crucial for potential guarantors to fully understand these waivers and the potential financial implications before signing the guarantee.
This type of comprehensive waiver is not uncommon in franchise agreements, as franchisors seek to minimize obstacles in recovering payments or ensuring performance. However, the extent of the waivers should be carefully considered by anyone acting as a guarantor, and they should seek legal advice to fully understand the risks involved.