Does CJR's acceptance of a site for a Carls franchise guarantee a certain sales volume or level of profitability for the Franchised Restaurant at that Authorized Site?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
CJR's acceptance of one or more sites is not a representation or a promise by CJR that a Franchised Restaurant at an Authorized Site will achieve a certain sales volume or a certain level of profitability. Similarly, CJR's acceptance of one or more sites and its refusal to accept other sites is not a representation or a promise that an Authorized Site will have a higher sales volume or be more profitable than a site which CJR did not accept. Acceptance by CJR merely means that the minimum criteria which CJR has established for identifying suitable sites for proposed Carl's Jr. Restaurants have been met. Because real estate development is an art and not a precise science, Developer agrees that acceptance, or refusal to accept a proposed site by CJR, whether or not a site report is completed and/or submitted to CJR shall not impose any liability or obligation on CJR.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, CJR's acceptance of a site for a Carls Jr. restaurant does not guarantee any specific sales volume or level of profitability. The FDD clearly states that site acceptance should not be interpreted as a promise of financial success at that location.
Carls Jr. emphasizes that site acceptance only means the location meets the minimum criteria the company has established for suitable sites. The company acknowledges that real estate development involves inherent uncertainties, so the franchisee bears the ultimate responsibility for site selection. Carls Jr. explicitly denies any liability related to site evaluations, including environmental factors, compliance with the Americans with Disabilities Act (ADA), or other legal requirements.
This disclaimer is a standard practice in the franchise industry, as franchisors cannot accurately predict the success of a location due to various market factors and the franchisee's operational capabilities. Prospective Carls Jr. franchisees should conduct their own thorough due diligence, including market research and financial projections, before committing to a specific site. They should also seek professional advice to assess potential risks and opportunities associated with the location.