If requested by CJR, what application must a Carls developer submit for each proposed site for a Franchised Restaurant?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
For each proposed site for a Franchised Restaurant, Developer shall, if requested by CJR, submit to CJR a Franchise Site Application. In addition, Developer shall submit a development proposal (containing that information as CJR may reasonably require) for a proposed site which Developer reasonably believes to conform to site selection criteria CJR establishes from time to time for demographic characteristics, traffic patterns, parking, character of the neighborhood, competition from other businesses in the area, the proximity to other businesses (including restaurants operated or franchised by CJR or its affiliates), the nature of other businesses in proximity to the site and other commercial characteristics (including the purchase price, rental obligations and other lease terms for the proposed site) and the size, appearance, other physical characteristics, and a site plan of the premises.
Developer acknowledges that, in order to preserve and enhance the reputation and goodwill of all restaurants franchised by CJR and the goodwill of the Proprietary Marks, all Franchised Restaurants must be properly developed, operated and maintained. Accordingly, Developer agrees that CJR may refuse to accept a site for a proposed Franchised Restaurant unless Developer demonstrates sufficient financial capabilities, in CJR's sole judgment, applying standards consistent with criteria CJR uses to establish restaurants in other comparable market areas, to properly develop, operate and maintain the proposed Franchised Restaurant. To this end, Developer shall furnish CJR with such financial statements and other information regarding Developer (or its Affiliated Entity, as defined in Section 3.E.) and the development and operation of the proposed Franchised Restaurant, including, without limitation, investment and financing plans for the proposed Franchised Restaurant, as CJR reasonably may require.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, if requested by CJR, a developer must submit a Franchise Site Application for each proposed restaurant site. In addition to the application, the developer needs to submit a development proposal containing information that CJR may reasonably require. This proposal should align with CJR's site selection criteria, which includes demographic characteristics, traffic patterns, parking availability, neighborhood character, competition from other businesses, proximity to other businesses (including those operated or franchised by CJR or its affiliates), the nature of nearby businesses, commercial characteristics (like purchase price, rental obligations, and lease terms), and the size, appearance, physical characteristics, and site plan of the premises.
Carls requires that all franchised restaurants are properly developed, operated, and maintained to preserve the brand's reputation and goodwill. Therefore, Carls may refuse a site if the developer cannot demonstrate sufficient financial capabilities to properly develop, operate, and maintain the proposed restaurant, based on standards consistent with criteria Carls uses in comparable market areas.
To demonstrate financial capabilities, the developer must furnish Carls with financial statements and other information regarding the developer (or its Affiliated Entity) and the development and operation of the proposed restaurant. This includes investment and financing plans for the proposed restaurant, as Carls may reasonably require. This ensures that Carls maintains control over site selection and upholds brand standards, while also placing the onus on the developer to conduct thorough due diligence and secure appropriate financing.