How often can CJR request a Carls franchisee to modernize their restaurant, excluding repairs, maintenance, legal modifications, or hazardous situations?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Within 60 days after receipt of CJR's written notice regarding the required modernization, Franchisee shall prepare and complete drawings and plans for the required modernization.
These drawings and plans must be submitted to, and their use approved by, CJR prior to the commencement of work.
Franchisee shall complete the required modernization within the time reasonably specified by CJR in its written notice.
- D. CJR has the right, in its sole discretion, to waive, defer or permit variations from the standards of the System or the applicable agreement to any franchisee or prospective franchisee based on the peculiarities of a particular site, existing building configuration or circumstance, density of population, business potential, trade area population or any other condition or circumstance.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
The 2024 Franchise Disclosure Document does not specify a limit to how often CJR (Carls Jr. Restaurants) can request a franchisee to modernize their restaurant, provided that the modernization does not involve repairs, maintenance, modifications required by law, or actions needed to abate a hazardous situation.
According to the FDD, after receiving written notice from CJR regarding a required modernization, the franchisee must prepare and complete drawings and plans within 60 days. These plans must be approved by CJR before any work begins. The franchisee is then expected to complete the modernization within a timeframe that CJR reasonably specifies in its written notice.
This lack of a specified limit gives Carls significant discretion in requiring franchisees to update their restaurants. While the modernization requests must be reasonable, the franchisee bears the responsibility for the costs associated with these updates. A prospective franchisee should consider the potential financial burden of frequent modernization requirements and negotiate for more predictability or limitations on such requests during the franchise agreement negotiation.