Is the franchisee's experience a factor in CJR's decision to grant a Carls franchise?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall advise CJR in writing of any proposed Transfer, submit (or cause the proposed transferee to submit) a franchise application for the proposed transferee, submit a copy of all
contracts and all other agreements or proposals and submit all other information requested by CJR relating to the proposed Transfer. If CJR does not exercise its right of first refusal pursuant to Section 18.J., the decision as to whether or not to consent to a proposed Transfer shall be made by CJR in its sole discretion and shall include numerous factors deemed relevant by CJR. These factors may include, but will not be limited to, the following:
- (1) The proposed transferee (and if the proposed transferee is not a natural person, all persons that have any direct or indirect interest in the transferee as CJR may require) must demonstrate to CJR's satisfaction extensive experience in high quality restaurant operations of a character and complexity similar to Carl's Jr.
Restaurants; must meet the managerial, operational, experience, quality, character and business standards for a franchisee promulgated by CJR from time to time; must possess a good character, business reputation and credit rating; must have an organization whose management culture is compatible with CJR's management culture; and must have adequate financial resources and working capital, as determined by CJR in its sole discretion, to meet Franchisee's obligations under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to the 2024 Carls Franchise Disclosure Document, the franchisee's experience is a factor when CJR considers a transfer of ownership. Specifically, if an existing franchisee wants to transfer their franchise to someone else, the proposed transferee's experience is evaluated by Carls.
Carls requires that the proposed transferee demonstrate "extensive experience in high quality restaurant operations of a character and complexity similar to Carl's Jr. Restaurants." The transferee must also meet Carls' standards for a franchisee regarding managerial, operational, experience, quality, character, and business standards.
In addition, the proposed transferee must have a good character, business reputation, and credit rating. Their organization's management culture must be compatible with Carls' management culture, and they must have adequate financial resources and working capital to meet the obligations of the Franchise Agreement. These criteria ensure that any new franchisee taking over an existing location has the necessary skills, experience, and resources to successfully operate the Carls franchise.