What is the statute of limitations for legal actions related to the Carls Jr. Development Agreement, excluding payment disputes?

According to the 2025 Carls Jr. Franchise Disclosure Document, any legal action related to the Development Agreement, excluding payment disputes, must be initiated within a specific timeframe. Specifically, any legal action or proceeding arising from or related to the Development Agreement, or any breach of its terms, must be brought within 2 years. This 2-year period begins after the initial occurrence of the act or omission that forms the basis of the legal action, regardless of when it was discovered.

This limitation period has significant implications for prospective Carls Jr. developers. It means that if a developer believes Carls Jr. has breached the agreement or committed some other actionable wrong, they must act quickly to investigate and, if necessary, file a lawsuit. Failing to do so within the 2-year window could result in the claim being time-barred, meaning the developer would lose the right to sue, regardless of the merits of the case.

The exclusion of payment disputes from this limitation is also noteworthy. This likely means that claims for unpaid fees or other monetary obligations are subject to a different, potentially longer, statute of limitations as prescribed by applicable law. This is a common practice, as payment obligations are often considered distinct from other contractual breaches.

It is important for prospective Carls Jr. developers to be aware of this limitation period and to consult with an attorney to understand their rights and obligations under the Development Agreement. They should also keep detailed records of all interactions with Carls Jr. and any potential breaches of the agreement, as this information will be crucial in determining when the 2-year period begins to run.