According to the 2024 FDD, the Development Fee for a Carls franchise is not refundable. If a franchisee enters into a Development Agreement with CJR, they must pay a Development Fee of $10,000 for each restaurant they agree to develop. This fee is paid when the agreement is signed.

However, the $10,000 Development Fee is not entirely lost. When the franchisee executes a Franchise Agreement for a new restaurant under the Development Agreement, the $10,000 Development Fee associated with that restaurant will be credited against the Initial Franchise Fee. This means the franchisee will pay $10,000 less for the Initial Franchise Fee, which is normally $25,000.

In essence, the Development Fee acts as a deposit that is applied to the Initial Franchise Fee upon the opening of each restaurant. While the initial payment is non-refundable, it ultimately contributes to the overall cost of opening the franchise, reducing the amount due later. This is a fairly standard practice in franchising, where initial fees are often used to secure development rights and are then applied to future franchise fees.