Is a Carls Jr. franchisee required to reimburse CJR for costs related to inspections of the franchised restaurant?

According to Carls's 2024 Franchise Disclosure Document, a franchisee is required to reimburse CJR for costs related to inspections of the franchised restaurant. CJR has the right to inspect the franchised location at any reasonable time and without prior notice to ensure compliance with the franchise agreement, quality standards, and operating procedures. These inspections may include observing, photographing, and videotaping operations; removing samples for testing; interviewing personnel and customers; and inspecting records.

The franchisee must cooperate fully with CJR during these inspections and take immediate steps to correct any deficiencies found. If CJR deems the deficiencies an imminent health hazard, it may direct the franchisee to temporarily close the restaurant until the issues are resolved to CJR's satisfaction. The franchisee is also required to present evaluation forms to customers and participate in surveys as directed by CJR.

Specifically, the FDD states that the franchisee "will reimburse CJR for all costs related to the Franchised Restaurant associated with any and all of these inspections and related activities set forth above." This means that franchisees should be prepared to cover expenses CJR incurs while conducting inspections, which could include travel, labor, and other associated costs. This reimbursement requirement is in addition to the franchisee's other financial obligations, such as royalty fees and advertising contributions.