What do Carl's Jr. collection costs and expenses include?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Collection Costs and Expenses | CJR's costs and expenses | On demand, if required | These costs and expenses include, but are not limited to, costs and commissions due a collection agency, reasonable attorneys' fees, costs incurred in creating or replicating reports demonstrating Gross Sales of the Franchised Restaurant, court costs, expert witness fees, discovery costs and reasonable attorneys' fees and costs on appeal, together with interest charges on all of the foregoing. |
Source: Item 6 — Other Fees (FDD pages 26–31)
What This Means (2024 FDD)
According to the 2024 Carls Franchise Disclosure Document, collection costs and expenses that Carls may charge a franchisee include a range of items related to recovering owed amounts. These costs are due on demand if required by Carls.
Specifically, these costs encompass expenses such as fees and commissions paid to collection agencies, reasonable attorney's fees, and costs associated with creating or replicating reports to demonstrate the franchised restaurant's gross sales. This suggests that if a franchisee is not accurately reporting sales, Carls may incur costs to verify the actual sales figures, and the franchisee would be responsible for covering these expenses.
Furthermore, the collection costs may also include court costs, expert witness fees, discovery costs, and reasonable attorney's fees and costs on appeal. Additionally, Carls may charge interest on all of the aforementioned costs. This comprehensive list indicates that Carls intends to recover all expenses incurred in the process of collecting outstanding debts from franchisees, potentially creating a significant financial burden for franchisees who fail to meet their financial obligations.