What must a Carls franchisee provide to CJR immediately upon execution of the Franchise Agreement regarding the Franchised Location's lease or real estate purchase?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee has not previously provided CJR with a fully-signed copy of its lease or sublease for the Franchised Location, or proof that Franchisee has purchased the real estate for the Franchised Location, Franchisee shall immediately upon execution of this Agreement provide CJR with a copy of the fully-signed lease or sublease, together with the executed Carl's Jr. Lease Addendum in the form attached as Appendix G. For purposes of this Agreement, the effective date of the lease or sublease, or the closing date of the purchase of the real property, shall be the "Property Control Date".
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, immediately after signing the Franchise Agreement, a franchisee must provide CJR (Carls Jr. Restaurants LLC) with specific documentation related to the Franchised Location. If the franchisee hasn't already done so, they need to submit a fully-signed copy of their lease or sublease agreement. Alternatively, if the franchisee has purchased the real estate for the Franchised Location, they must provide proof of this purchase to CJR.
In addition to the lease or sublease, the franchisee is also required to submit the executed Carl's Jr. Lease Addendum, which is included as Appendix G in the FDD. This addendum likely contains specific terms and conditions that Carls requires to be part of the lease agreement. The date the lease or sublease becomes effective, or the closing date of the real estate purchase, is termed the "Property Control Date" under the Franchise Agreement.
This requirement ensures that Carls has proper documentation and control over the location where the franchise will operate. It allows Carls to verify the franchisee's legal right to occupy and use the premises, and to ensure that the lease terms are consistent with Carls's requirements. The Property Control Date is a key milestone, as it marks the point from which other obligations and timelines under the Franchise Agreement may be calculated.