In the limited circumstances where there is geographic overlap between Carl's Jr. and Hardee's Restaurants, how will any potential conflict between the franchisees of each system be resolved?

According to Carls's 2024 Franchise Disclosure Document, while Carl's Jr. and Hardee's restaurants typically operate in separate geographic areas, there are limited instances where overlap occurs. In these situations, both HR (Hardee's Restaurants) and its franchisees retain the right to solicit and accept orders within the same area as Carl's Jr. franchisees. Any conflicts that may arise between franchisees of each system will be resolved on a case-by-case basis.

This means that if a prospective Carls franchisee opens a location in an area where Hardee's also operates, there is a possibility of direct competition between the two brands. Carls does not provide a guaranteed resolution process in the FDD, instead stating that conflicts will be handled individually. This lack of a pre-defined resolution mechanism introduces uncertainty for franchisees.

Prospective franchisees should be aware that Carls's approach to conflict resolution in overlapping territories is not clearly defined. This contrasts with some franchise systems that establish specific protocols or mediation processes to address territorial disputes. It is important for potential franchisees to understand the implications of this case-by-case approach and to assess the potential for conflict in their desired location. They should inquire with Carls about past instances of conflict resolution and the factors considered in these decisions to better understand the potential risks and outcomes.