What are the Carls franchisee's obligations regarding site selection and acquisition/lease as outlined in Item 9, and how do these relate to the site selection assistance provided by the franchisor in Item 11?

According to Carls's 2024 Franchise Disclosure Document, Item 9 outlines the franchisee's obligations, including site selection and acquisition/lease, as detailed in the Franchise Agreement's Section 3 and the Development Agreement's Sections 3-5, and further discussed in Items 7 and 11. Item 11 specifies the site selection assistance Carls provides.

Carls does not select the site for the Franchised Restaurant; the franchisee does, subject to Carls's acceptance. Franchisees should not acquire any interest in a site until they are approved as a franchisee and Carls has accepted the site in writing. If Carls requests, the franchisee must submit a Franchise Site Application and a complete real estate package with information on demographic characteristics, traffic patterns, parking, neighborhood character, competition, proximity to other businesses, the nature of other businesses, commercial characteristics (purchase price, rental obligations, lease terms), and the size, appearance, and site plan of the premises. Carls will advise the franchisee in writing within 30 days after receiving all required documents whether the site is accepted. However, Carls is not obligated to review any proposal if the franchisee is not in full compliance with all agreements.

Following Carls's acceptance of a site, the franchisee must secure the site by entering into a lease or sublease or purchasing the real property within 6 to 9 months after site acceptance (the "Property Control Date"). Construction must commence within 6 months after the Property Control Date, and the Franchised Restaurant must open within 18 months after the Property Control Date. Failure to meet these deadlines may result in the site acceptance being withdrawn or the Franchise Agreement being terminated. Carls may refuse to accept a site unless the franchisee demonstrates sufficient financial capabilities to properly develop, operate, and maintain the Franchised Restaurant, providing financial statements and other information as reasonably required by Carls.

Carls provides site selection assistance in the form of site selection guidelines and consultation, as well as on-site evaluation as deemed advisable. However, Carls's acceptance of a site does not guarantee a certain sales volume or level of profitability. It only indicates Carls's willingness to be represented by the franchisee at that site.