Does the provision regarding questionnaires and acknowledgments for Carls Jr. supersede other terms in documents related to the franchise?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
The following language is hereby added to the Franchise Disclosure Document if you are a resident of one of the states listed in the heading of this Rider (the "Applicable Franchise Registration State") or a non-resident who is acquiring franchise rights permitting the location of one or more Carl's Jr. Restaurants in the Applicable Franchise Registration State:
"No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise."
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a specific provision addresses the enforceability of statements, questionnaires, or acknowledgments signed by franchisees. For franchisees residing in or opening a franchise in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin, this provision takes precedence over any conflicting terms in any document related to the franchise agreement.
Specifically, this provision ensures that no statement, questionnaire, or acknowledgment can waive claims under applicable state franchise law, including claims of fraud in the inducement. It also prevents franchisees from disclaiming reliance on statements made by Carls Jr., its franchise sellers, or anyone acting on its behalf. This protection is crucial for franchisees as it safeguards their rights and ensures they cannot inadvertently forfeit legal recourse due to signing certain documents at the beginning of their franchise relationship.
This type of clause is designed to protect franchisees from potentially overreaching franchisor actions. By explicitly stating that this provision supersedes other terms, Carls Jr. clarifies that franchisees in the specified states retain their rights under state franchise laws and can rely on the franchisor's representations, regardless of any conflicting language in other documents. Prospective franchisees should carefully note this provision, especially if they are located in one of the listed states, as it provides an additional layer of protection under the franchise agreement.