What is the deadline for executing the Carls Jr. Franchise Agreement after site acceptance?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
No later than our acceptance of a site and your execution of a lease or sublease of the site, or the closing on your purchase of the site, you and we will execute a Franchise Agreement (the current form is attached as Exhibit D), which will govern your development and operation of the Franchised Restaurant, and you will pay the Initial Franchise Fee. You may not commence construction until the Franchise Agreement is fully executed. You will execute the form of Franchise Agreement in use at the time immediately prior to your commencing construction of the Franchised Restaurant.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 7–19)
What This Means (2024 FDD)
According to the 2024 Carls Jr. Franchise Disclosure Document, after Carls Jr. accepts a proposed site and the franchisee executes a lease, sublease, or closes on the purchase of the site, both parties will then execute the Franchise Agreement. This agreement governs the development and operation of the franchised restaurant. The franchisee cannot begin construction until the Franchise Agreement is fully executed.
This means that a prospective Carls Jr. franchisee must act promptly to finalize the Franchise Agreement once a site is approved and secured. Delaying the execution of the Franchise Agreement could postpone the start of construction, potentially affecting the overall timeline for opening the restaurant.
Carls Jr. also stipulates that the franchisee will use the form of Franchise Agreement that is current immediately before construction begins. This implies that the terms of the agreement could change between site acceptance and the start of construction, so franchisees need to stay informed of any updates from Carls Jr.