Is a transfer by operation of law without Carls Jr.'s consent considered a breach of the agreement?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise provided in this Agreement, any purported Transfer, by operation of law or otherwise, not having the prior written consent of CJR shall be null and void and shall constitute a material breach of this Agreement, for which CJR may terminate this Agreement without providing Developer an opportunity to cure the breach.
CJR TR Development Agreement – 5/25
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a transfer by operation of law without the prior written consent of CJR (Carls Jr.) is considered a material breach of the agreement. This means that if a transfer occurs due to circumstances like death or legal judgment and Carls Jr.'s approval hasn't been obtained beforehand, it constitutes a significant violation of the franchise agreement.
Carls Jr. has the right to terminate the agreement immediately without providing an opportunity for the franchisee to correct the breach. This is a strict condition, highlighting the importance Carls Jr. places on controlling who becomes a franchisee and operates a Carls Jr. location.
This provision protects Carls Jr. from unwanted or unqualified individuals or entities taking control of a franchise. It ensures that all franchisees meet Carls Jr.'s standards and that the brand's reputation is maintained. Prospective franchisees should be aware of this clause and understand the implications of any transfer, whether voluntary or involuntary, on their franchise agreement.