Under what circumstances does the 90-day notice provision for termination, cancellation, or non-renewal not apply to a Carls Jr. franchise in Wisconsin?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 135.04 of the Wisconsin Fair Dealership Law includes the requirement that, in certain circumstances, a franchisee receive 90 days' notice of termination, cancellation, non-renewal or substantial change in competitive circumstances. The notice shall state all the reasons for termination, cancellation, non-renewal or substantial change in competitive circumstances and shall provide that the franchisee has 60 days in which to rectify any claimed deficiency and shall supersede the requirements of paragraph 18 of the Franchise Agreement to the extent they may be inconsistent with the Law's requirements. If the deficiency is rectified within 60 days the notice shall be void. The above-notice provisions shall not apply if the reason for termination, cancellation or nonrenewal is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy. If the reason for termination, cancellation, nonrenewal or substantial change in competitive circumstances is nonpayment of sums due under the Franchise Agreement, Franchisee shall be entitled to written notice of such default, and shall have 10 days in which to remedy such default from the date of delivery or posting of such notice.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a Wisconsin franchisee may not receive the standard 90-day notice of termination, cancellation, or non-renewal under specific conditions. This exception is tied to Section 135.04 of the Wisconsin Fair Dealership Law, which generally requires a 90-day notice period for such actions, allowing the franchisee 60 days to rectify any deficiencies.
However, this 90-day notice provision does not apply if the reason for termination, cancellation, or non-renewal is due to the franchisee's insolvency, an assignment for the benefit of creditors, or bankruptcy. Additionally, if the cause for such action is the nonpayment of sums due under the Franchise Agreement, the franchisee is entitled to a written notice of default and only has 10 days to remedy the default from the date the notice was delivered or posted.
This stipulation is crucial for prospective Carls Jr. franchisees in Wisconsin to understand, as it outlines specific scenarios where the standard notice period is waived or significantly reduced. Franchisees should be aware of their obligations and potential risks related to financial stability and adherence to payment terms to avoid facing expedited termination or non-renewal of their franchise agreement.