Under what conditions can Carls Jr. or its designee control the handling of a Crisis Situation at a franchised restaurant?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
If an event occurs at the Franchised Restaurant that may damage the Proprietary Marks, the System or the reputation of CJR (collectively "Crisis Situation"), Franchisee shall: (1) immediately contact appropriate emergency care providers to assist it in curing the harm or injury; and (2) immediately inform CJR by telephone of the Crisis Situation. Franchisee shall refrain from making any internal or external announcements (i.e., no communication with the news media) regarding the Crisis Situation (unless otherwise directed by CJR or public health officials).
To the extent CJR deems appropriate, in its sole and absolute discretion, CJR or its designee may control the manner in which the Crisis Situation is handled by the parties, including, without limitation, conducting all communication with the news media and/or temporarily closing the Franchised Restaurant. The parties acknowledge that, in directing the management of any Crisis Situation, CJR or its designee may engage the services of attorneys, experts, doctors, testing laboratories, public relations firms and those other professionals as it deems appropriate. Franchisee and its employees shall cooperate fully with CJR or its designee in its efforts and activities in this regard and shall be bound by all further Crisis Situation procedures developed by CJR from to time hereafter. The indemnification under Section 25 shall include all losses and expenses that may result from the exercise by CJR or its designee of the management rights granted in this Section 32.G.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. or its designee can control the handling of a crisis situation at a franchised restaurant to the extent that Carls Jr. deems appropriate in its sole and absolute discretion. A "Crisis Situation" is defined as an event occurring at the franchised restaurant that may damage the Proprietary Marks, the System, or the reputation of Carls Jr.
In the event of a Crisis Situation, the franchisee must immediately contact emergency care providers to address the harm or injury and inform Carls Jr. by telephone. The franchisee is required to refrain from making any internal or external announcements, including communication with the news media, unless directed otherwise by Carls Jr. or public health officials.
Carls Jr. or its designee may manage the Crisis Situation, including conducting communication with the news media and temporarily closing the franchised restaurant. Carls Jr. may also engage attorneys, experts, doctors, testing laboratories, public relations firms, and other professionals as deemed necessary. The franchisee and its employees must fully cooperate with Carls Jr. in these efforts and adhere to any Crisis Situation procedures developed by Carls Jr. The franchisee is also responsible for indemnifying Carls Jr. for losses and expenses resulting from the exercise of these management rights.