factual

For the Carls franchise, is the franchisee required to sign a loyalty program agreement with CJR or a third-party provider during the term of the agreement?

Carls Franchise · 2024 FDD

Answer from 2024 FDD Document

program agreement as requested by CJR, either directly with CJR and/or with a third party provider, at any time during the term of this Agreement.

B. Production Fund

CJR has established, and will maintain and administer a fund for the creation and development of advertising, marketing, social media and public relations, research and related programs, gift card and loyalty programs, activities and materials that CJR, in its sole discretion, deems appropriate ("Production Fund"). Franchisee shall contribute to the Production Fund the amount set forth in Appendix C, as subsequently modified pursuant to Section 8.F. Carl's Jr. Restaurants operated by CJR and its affiliates shall contribute to the Production Fund on the same basis as comparable franchisees.

Franchisee must participate in the Carl's Jr. Gift Card Program or other gift card program that CJR specifies. If necessary, Franchisee must purchase the software, hardware, blank cards, and other items needed to sell and process gift cards or stored value cards, which CJR may specify in writing in the OPM or otherwise. Franchisee must sell and honor gift cards only in accordance with CJR's written standards. Franchisee must account for all gift card sales, gift card redemptions, and other gift card transactions in the manner CJR specifies in this Agreement, the OPM, or other standards. Franchisee agrees that it will enter into a Participation Agreement with CJR's gift card service provider, Stored Value Systems, Inc., immediately after the opening of the Franchised Restaurant.

Source: Item 22 — CONTRACTS (FDD page 80)

What This Means (2024 FDD)

According to Carls's 2024 Franchise Disclosure Document, franchisees may be required to sign a loyalty program agreement with CJR or a third-party provider during the term of the agreement. Specifically, Carls has established a Production Fund for various programs, including gift card and loyalty programs.

Carls franchisees must participate in the Carl's Jr. Gift Card Program or any other gift card program that CJR specifies. This includes purchasing necessary software, hardware, blank cards, and other items to sell and process gift cards as specified in writing by CJR. Franchisees are obligated to sell and honor gift cards according to CJR's written standards and must accurately account for all gift card transactions as outlined in the agreement, the OPM (Operation Procedures Manual), or other standards.

Furthermore, franchisees are required to enter into a Participation Agreement with CJR's gift card service provider, Stored Value Systems, Inc., immediately after the Franchised Restaurant opens. This indicates that Carls actively manages and mandates participation in loyalty and gift card programs, ensuring consistency across all franchise locations.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.