How does the Carls's Development Fee in Item 5 relate to the franchisee's obligation to participate in the franchisor's training programs, as potentially outlined in Item 11?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| Obligation | Section in Franchise Agreement (FA) and Development Agreement (DA) | Disclosure Document Item | |
|---|---|---|---|
| d. | Initial and ongoing training | FA: Section 11 DA: Section 5 | Items 5, 6, 7 & 11 |
3. Provide you with any training we require. (Development Agreement, § 5.F.; Franchise Agreement, §6.A. & 6.I.)
4. Provide additional training to you, if we decide to offer any additional training. We reserve the right to require you to pay a tuition fee for these additional training programs, and you will be required to pay all travel, living and other expenses incurred by your employees while attending the training. (Franchise Agreement, §11.B.)
A. Development Training
Franchisee shall complete, to CJR's satisfaction, any development training required by CJR. Franchisee shall pay CJR, for each person attending development training, a tuition fee as established by CJR from time to time. Franchisee also may attend optional development training as offered by CJR from time to time, subject to payment of a tuition fee as established by CJR from time to time. Franchisee will be required to pay all travel, living and other expenses incurred by Franchisee and its employees while attending development training and optional development training.
- 3.2 Initial Training Support for PAR Brink and Crunch Time Software. In order to facilitate the support services, Franchisee agrees to purchase and participate in mandatory initial training programs for use of the PAR Brink and Crunch Time software. The scope of the training programs for each software is set forth on Exhibit C to this Agreement. The cost for the training programs shall be a one-time fee of $1,250
Before you may develop and open a Franchised Restaurant, CJR must approve you as a franchisee (or, if you already are a franchisee, approve you for expansion), CJR must accept the location of your proposed Franchised Restaurant, you must attend and successfully complete CJR's franchise management training program ("FMTP")
What This Means (2024 FDD)
According to the 2024 Carls FDD, Item 9 outlines the franchisee's obligations, referencing both Item 5 (which would include the Development Fee) and Item 11 (Franchisor's Assistance, Advertising, Computer Systems, and Training) in relation to initial and ongoing training. This indicates that the Development Fee and the training programs are related franchisee obligations. Item 11 further specifies that Carls will provide any training they require to the franchisee.
Carls also offers additional training, for which they reserve the right to charge a tuition fee. The franchisee is responsible for covering all travel, living, and other expenses incurred by their employees while attending these training sessions. Furthermore, franchisees must complete any development training required by Carls to their satisfaction. Franchisees are also responsible for paying tuition fees for each person attending development training, as determined by Carls. Optional development training may also be available, subject to tuition fees.
In addition to the above, franchisees are also required to purchase and participate in mandatory initial training programs for the use of PAR Brink and Crunch Time software. The cost for these training programs is a one-time fee of $1,250, which will be billed upon execution of the agreement. Additional training programs may be made available at Carls' discretion, for additional fees. Before a franchisee can develop and open a franchised restaurant, they must attend and successfully complete Carls' franchise management training program (FMTP).
In summary, while the Development Fee itself is not directly used to fund the training programs, both the fee and the mandatory training are part of the franchisee's overall obligations. The franchisee should clarify with Carls what portion of the initial investment, if any, covers the costs of required training programs, and what additional training fees they might incur.