Under the Carls Jr. agreement, what is required for a party to assign the agreement to another party?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.4. Assignment. Neither party may assign or transfer any part of this Agreement without the prior written consent of the other Party except that this Agreement may be assigned without consent: (a) to a person or entity who acquires all or substantially all of the assigning Party's assets, stock or business, and (b) to any affiliate or subsidiary of a Party; in each case, so long as the assignee accepts the obligations hereunder in writing. Any purported assignment of rights or obligations, except as expressly permitted herein, will be null and void. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties and their respective permitted successors and assigns.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 FDD, the Carls Jr. agreement outlines specific conditions for assigning or transferring any part of the agreement. Generally, a party needs the prior written consent of the other party before assigning or transferring the agreement.
However, there are exceptions where assignment can occur without prior consent. These include assignment to a person or entity who acquires all or substantially all of the assigning party's assets, stock, or business. It also includes assignment to any affiliate or subsidiary of a party. In both of these cases, the assignee must accept the obligations of the agreement in writing.
Any attempt to assign rights or obligations that does not comply with these permitted conditions will be considered null and void. The agreement specifies that it is binding and will benefit the parties involved, as well as their respective permitted successors and assigns. This clause ensures clarity and protects the interests of all parties involved in the Carls Jr. franchise agreement.