Does Carls currently plan to operate or franchise any business under a different trademark that sells similar goods or services to those that its franchisees sell?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Except as described in Item 1, we do not operate or franchise, or currently plan to operate or franchise, any business under a different trademark that sells or will sell goods or services similar to those that our franchisees sell. However, our affiliates, including the Affiliated Programs described in Item 1 and other portfolio companies that currently are or in the future may be owned by private equity funds managed by Roark Capital Management, LLC, may operate and/or franchise businesses that sell similar goods or services to those that our franchisees sell. Item 1 describes our current Affiliated Programs that offer franchises, their principal business addresses, the goods and services they sell, whether their businesses are franchised and/or company-owned, and their trademarks. All of these other brands (with limited exceptions) maintain offices and training facilities that are physically separate from the offices and training facilities of our franchise network. Most of the Affiliated Programs are not direct competitors of our franchise network given the products or services they sell, although some are, as described in Item 1. All of the businesses that our affiliates and their franchisees operate may solicit and accept orders from customers near your business. Because they are separate companies, we do not expect any conflicts between our franchisees and our affiliates' franchisees regarding territory, customers and support, and we have no obligation to resolve any perceived conflicts that might arise.
Source: Item 12 — TERRITORY (FDD pages 54–56)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, Carls does not currently plan to operate or franchise any business under a different trademark that sells goods or services similar to those its franchisees sell, except as described in Item 1 of the FDD. However, Carls's affiliates, including Affiliated Programs and other portfolio companies owned by Roark Capital Management, LLC, may operate or franchise businesses that sell similar goods or services.
The FDD specifies that Item 1 describes the Affiliated Programs, their business addresses, the goods and services they sell, whether they are franchised or company-owned, and their trademarks. While most Affiliated Programs are not direct competitors, some may be, as detailed in Item 1. All businesses operated by Carls's affiliates and their franchisees can solicit orders from customers near a franchisee's business.
Carls states that because these affiliated companies are separate entities, they do not anticipate conflicts regarding territory, customers, or support, and they have no obligation to resolve any perceived conflicts. This arrangement means that while Carls itself isn't planning to directly compete under a different brand, potential franchisees should be aware of possible competition from affiliated brands and understand that Carls will likely not intervene in any conflicts that may arise.