Which section of the Carls Jr. franchise agreement outlines the franchisee's obligations upon termination or expiration of the agreement?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
of, Franchisee's obligation to fully comply with its obligations under Section 20.C. following termination of this Agreement.
- C. Franchisee promptly shall return to CJR the OPM, any copies of the OPM and all other materials and information furnished by CJR and delete all electronic copies of the OPM and all other materials and information furnished by CJR that are in Franchisee's possession. Franchisee promptly shall return to CJR, in good condition and repair excepting normal wear and tear, all computer software, disks, tapes and other electronic and magnetic storage media.
- D. Franchisee and all persons and entities subject to the covenants contained in Section 20 shall continue to abide by those covenants and shall not, directly or indirectly, take any action that violates those covenants.
- E. Franchisee immediately shall discontinue all use of the Proprietary Marks in connection with the Franchised Restaurant and of any and all items bearing the Proprietary Marks; remove the Proprietary Marks from the Franchised Restaurant and from clothing, signs, materials, motor vehicles and other items owned or used by Franchisee in the operation of the Franchised Restaurant (unless CJR directs
Franchisee to temporarily refrain from doing so while CJR determines if it will exercise its option under Section 23); cancel all advertising for the Franchised Restaurant that contains the Proprietary Marks (including telephone directory listings); and take such action as may be necessary to cancel any filings or registrations for the Franchised Restaurant that contain any Proprietary Marks.
- F. Unless CJR directs Franchisee to temporarily maintain the existing appearance of the Franchised Location while CJR determines if it will exercise its option under Section 23, Franchisee promptly shall make such alterations and modifications to the Franchised Location as may be necessary to clearly distinguish to the public the Franchised Location from its former appearance and also make those specific additional changes as CJR may request for that purpose. If Franchisee fails to promptly make these alterations and modifications, CJR shall have the right (at Franchisee's expense, to be paid upon Franchisee's receipt of an invoice from CJR) to do so without being guilty of trespass or other tort.
- G. Franchisee shall furnish CJR, within 30 days after the effective date of termination or expiration, evidence (certified to be true, complete, accurate and correct by an authorized officer of Franchisee) satisfactory to CJR of Franchisee's compliance with Sections 22.A. through 22.F.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Section 22 of the franchise agreement details the franchisee's obligations upon termination or expiration. Specifically, Section 22 covers a range of post-termination responsibilities. These include altering the Franchised Location to remove any association with the Carls Jr. brand unless Carls Jr. directs otherwise while they consider exercising their purchase option.
Additionally, within 30 days of termination or expiration, the franchisee must provide certified evidence of their compliance with subsections A through F of Section 22. The franchisee is also restricted from operating under any name or manner that might suggest a connection to Carls Jr., using any materials or information provided by Carls Jr., or assisting anyone in creating a foodservice outlet similar to a Carls Jr. restaurant, except for existing or in-development Carls Jr. franchises.
Furthermore, upon termination or expiration of the Carls Jr. franchise agreement, the franchisee is required to return all computer software, disks, tapes, and other magnetic storage media to CJR in good operating condition, with allowances for normal wear and tear.