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Under what conditions does the Wisconsin Addendum apply to the Carls Jr. Franchise Agreement?

Carls_Jr Franchise · 2025 FDD

Answer from 2025 FDD Document

  • 1. The provisions of this Addendum form an integral part of, and are incorporated into, the Franchise Agreement. This Addendum is being executed because: (A) the offer or sale of a franchise to Franchisee was made in the State of Wisconsin; (B) Franchisee is a resident of the State of Wisconsin; and/or (C) the Franchised Restaurant will be located or operated in the State of Wisconsin.
  • 2. The Wisconsin Fair Dealership Law, Chapter 135, Stats., supersedes any provision of the Franchise Agreement inconsistent with that law.
  • 3. The following paragraph is added to the end of Sections 2.B. and 18:

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, the Wisconsin Addendum is an integral part of the Franchise Agreement and is executed under specific conditions. The addendum applies when (A) the offer or sale of a franchise to the Franchisee was made in the State of Wisconsin, (B) the Franchisee is a resident of the State of Wisconsin, or (C) the Franchised Restaurant will be located or operated in the State of Wisconsin.

This means that if a prospective Carls Jr. franchisee either receives the franchise offer in Wisconsin, lives in Wisconsin, or plans to operate their Carls Jr. restaurant in Wisconsin, the Wisconsin Addendum will be incorporated into their Franchise Agreement. This addendum modifies the standard franchise agreement to account for specific legal requirements in Wisconsin.

Specifically, the Wisconsin Fair Dealership Law, Chapter 135, Stats., takes precedence over any conflicting provisions in the Franchise Agreement. Furthermore, the addendum includes a stipulation regarding termination notice, aligning with Section 135.04 of the Wisconsin Fair Dealership Law, which requires a 90-day notice in certain termination scenarios, with a 60-day period for the franchisee to rectify any deficiencies. This addendum ensures that Carls Jr.'s franchise operations within Wisconsin comply with local laws designed to protect franchisees.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.