What are the potential costs associated with relocating a Carls franchise, and under what conditions can Carls deny a relocation request?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
e. | | Costs and Attorneys' Fees | CJR's costs and expenses | As incurred | If we prevail in litigation regarding enforcement of the terms of any agreement with you, you must pay our attorneys' fees and costs. |
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Carl's Jr. Renewal Fee | $5,000 for a renewal term of 5 years or less or $10,000 for a renewal term greater than 5 years, but no more than 10 years | At the time the new franchise agreement is signed | |
| Collection Costs and Expenses | CJR's costs and expenses | On demand, if required | These costs and expenses include, but are not limited to, costs and commissions due a collection agency, reasonable attorneys' fees, costs incurred in creating or replicating reports demonstrating Gross Sales of the Franchised Restaurant, court costs, expert witness fees, discovery costs and reasonable attorneys' fees and costs on appeal, together with interest charges on all of the foregoing. |
| Relocation | CJR's reasonable expenses | On demand, if required | You may not relocate the Franchised Restaurant without CJR's prior written consent, which may be withheld by CJR in its sole discretion. If we approve a relocation of your Franchised Restaurant, we have the right to charge you for all reasonable expenses actually incurred in connection with consideration of the request. |
| Reimbursement of Insurance Costs | Cost of obtaining coverage | Immediately upon receipt of invoice | If you fail to procure or maintain the required insurance, we may procure the insurance and charge its cost along with our out-of-pocket expenses to you. We collect the cost of the insurance coverage for the insurance company with which we place the coverage. |
| Web Site Fee | Actual co |
Source: Item 6 — Other Fees (FDD pages 26–31)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, a franchisee may incur costs if they wish to relocate their franchise. If a franchisee wants to move their restaurant, they must first obtain written consent from Carls. Carls has the right to deny a relocation request at their sole discretion.
If Carls approves the relocation, the franchisee is responsible for paying Carls's reasonable expenses actually incurred while considering the relocation request. The FDD does not specify what these expenses might include, but they could encompass administrative costs, travel expenses for site evaluation, and legal fees for reviewing the relocation's impact on the franchise agreement.
This policy gives Carls significant control over where its franchises operate, which is typical in franchising. It allows Carls to ensure that new locations do not negatively impact existing franchisees and align with the brand's overall strategy. A prospective franchisee should discuss with Carls what specific factors are considered during a relocation request and what typical expenses might be incurred if the relocation is approved.