When must the initial franchise fee be paid to CJR for a Carls franchise?

According to the 2024 Carls FDD, the initial franchise fee is due when the Franchise Agreement is executed. The standard initial franchise fee is $25,000. However, if the franchisee has entered into a Development Agreement, the balance of the initial franchise fee due to CJR is reduced to $15,000. Any Development Fees already paid will be credited against this initial franchise fee.

Carls requires franchisees to execute the Franchise Agreement when they enter into a lease or sublease for, or take fee title to, the real property upon which the Franchised Restaurant will be developed. Franchisees cannot commence construction until the Franchise Agreement is fully executed. This means the initial franchise fee, or the balance thereof, must be paid before construction can begin.

The initial franchise fee is considered fully earned by Carls upon payment and is non-refundable. This is a common practice in franchising, as the fee compensates the franchisor for granting the franchise and providing initial support. Prospective franchisees should be aware of this non-refundable policy and carefully consider their decision before signing the Franchise Agreement and paying the fee.