If a Carls franchisee loses possession of their premises, what conditions must they meet to relocate?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Our prior written consent is required before you relocate the Franchised Restaurant. If your right to possession of the Franchise Restaurant premises is lost through no act or failure to act on your part, you may relocate the Franchised Restaurant if: (1) we accept the new location; (2) you construct and equip a Franchised Restaurant at the new location in accordance with the then-current System standards and specifications; (3) a Franchised Restaurant at the new location is open to the public for business within 6 months after the loss of possession of the original franchised location; and (4) you reimburse us for all reasonable expenses actually incurred by us in connection with the acceptance of the new location.
Source: Item 12 — TERRITORY (FDD pages 54–56)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, a franchisee who loses possession of their restaurant premises through no fault of their own has the option to relocate, but must meet certain conditions.
The first condition is that Carls must approve the new location. This means the franchisee cannot simply move anywhere; Carls retains control over site selection to ensure it meets their standards. Second, the franchisee is responsible for constructing and equipping the new restaurant to Carls's then-current system standards and specifications. This could involve significant costs to ensure the new location aligns with the brand's image and operational requirements.
The franchisee must open the relocated Carls restaurant to the public within six months after losing possession of the original location. This tight timeline puts pressure on the franchisee to quickly secure a new site, complete construction, and resume operations. Finally, the franchisee must reimburse Carls for all reasonable expenses the company incurs while assessing and accepting the new location. These expenses could include travel, consulting fees, and other costs associated with the relocation approval process.
These conditions highlight the importance of securing a long-term, stable location for a Carls franchise. While the agreement allows for relocation in certain circumstances, the franchisee bears the responsibility for the costs and logistical challenges involved, and must adhere to Carls's strict requirements.