Is a Carls Jr. operator allowed to assign the Olo agreement to a third party?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
3.1. License. Subject to the terms and conditions of the Agreement and the applicable Addendums, Olo hereby grants to Operator, during the Term, a non-exclusive, nonsublicensable (except as permitted hereunder), non-transferable (except pursuant to Section 10.4) license to access and use for itself and its End Users, the specific Licensed Applications selected in the applicable Customer Order Form. Operator shall not (a) assign this Agreement to any third party (it being understood that any such assignment shall be void ab initio); or (b) transfer, sell, or assign the right to use the Licensed Applications, including for the avoidance of doubt to any Customer Third Party Provider (except pursuant to Section 10.4). Olo reserves the right, in its sole discretion, to promulgate commercially reasonable standards that must be adhered to by Customer Third Party Providers (including, but not limited to, Olo's certification of all integrations to the Olo APIs). Any Customer Third Party Provider's breach or suspected breach of data security or confidentiality, abuse, or malicious or suspected malicious activities, may (at Olo's sole discretion) necessitate the immediate suspension, and possible termination, of Customer Third Party Provider's access to the Licensed Applications. A breach of the obligationsset forth in this Section 3.1 by Operator may constitute a material breach of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a Carls Jr. operator is generally prohibited from assigning the Olo agreement to any third party. The agreement explicitly states that any such assignment would be considered void from the beginning. This restriction is in place to ensure that the operator adheres to the terms and conditions outlined in the agreement with Olo, which provides e-commerce, delivery enablement, and payment solutions. Olo maintains control over who utilizes their licensed applications and services.
This restriction has significant implications for prospective Carls Jr. franchisees. It means that the franchisee cannot transfer their rights or obligations under the Olo agreement to another party, even if they sell their franchise or transfer ownership. This limitation ensures that Olo maintains a direct relationship with the approved Carls Jr. operator and can enforce compliance with its standards and requirements. The franchisee must understand that the Olo agreement is tied to their specific operation and cannot be freely transferred.
The FDD also specifies that the operator cannot transfer, sell, or assign the right to use the licensed applications to any Customer Third Party Provider, except under specific conditions outlined in Section 10.4 of the agreement. This further reinforces Olo's control over the use of its platform and ensures that only authorized parties have access to its services. Any breach of these obligations by the operator may be considered a material breach of the agreement, potentially leading to termination of the Olo agreement.
For a prospective Carls Jr. franchisee, it is crucial to fully understand the terms and conditions of the Olo agreement, including the restrictions on assignment and transfer. They should discuss any potential scenarios where they might need to transfer the agreement with the franchisor and Olo to determine if any exceptions or alternatives are possible under Section 10.4. This due diligence will help the franchisee avoid any potential conflicts or breaches of the agreement during the term of their franchise.