What specific agreements did Carls Jr. allege 6Points breached in its Counterclaim?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
scribed above. On August 30, 2016, the defendants served the Statement of Defence of all defendants and CJR's Counterclaim. The Statement of Defence denies all liability and requests that the action be dismissed.
On August 30, 2016, the defendants served the Statement of Defence of all defendants and CJR's Counterclaim. The Statement of Defence denies all liability and requests that the action be dismissed. CJR's Counterclaim names 6Points, Michael Meekins and Michael Levine as defendants ("Franchisee Parties"). The Counterclaim asserts claims against 6Points for breach of its development, franchise, and letter of credit agreements, and for anticipatorily repudiating the development and franchise agreements, as well as for breach of its obligation of fair dealing. The Counterclaim asserts claims against Michael Meekins and Michael Levine for breach of a contract to provide a letter of credit, and asserts that they are liable for payment of all amounts owing by 6Points pursuant to a personal guarantee. The Counterclaim claims damages in an amount to be proven at trial.
On November 16, 2016, 6Points, Michael Meekins and Michael Levine served a Reply and Defence to Counterclaim. The Defence to Counterclaim denies all liability of 6Points, Michael Meekins and Michael Levine and requests that the Counterclaim be dismissed. On December 5, 2016, CJR served a Reply to Defence to Counterclaim. On December 19, 2018, the Court ordered, 6Points to deliver documents to CJR in preparation for further discoveries. On or about October 12, 2022, the parties reached an agreement to settle the litigation with the following terms: (a) defendants agreed to pay Franchisee Parties $5,500,000 US dollars, (b) the parties agreed to mutual releases
Source: Item 3 — LITIGATION (FDD pages 22–26)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr.'s Counterclaim against 6Points alleged breaches of several agreements. Specifically, Carls Jr. claimed that 6Points breached its development agreement, franchise agreement, and letter of credit agreements. Additionally, Carls Jr. asserted that 6Points anticipatorily repudiated the development and franchise agreements and breached its obligation of fair dealing.
The Counterclaim also targeted Michael Meekins and Michael Levine, alleging they breached a contract to provide a letter of credit and were liable for all amounts owed by 6Points due to a personal guarantee. Carls Jr. sought damages, the amount of which was to be determined at trial.
Ultimately, the litigation was settled. The defendants agreed to pay the Franchisee Parties $5,500,000, and both parties agreed to mutual releases of all claims, including those arising from the litigation, without any admission of liability. This resolution highlights the potential for significant legal disputes and financial settlements within the Carls Jr. franchise system, which prospective franchisees should consider.