Is prior written consent required from Carls before a franchisee relocates their Franchised Restaurant?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Our prior written consent is required before you relocate the Franchised Restaurant. If your right to possession of the Franchise Restaurant premises is lost through no act or failure to act on your part, you may relocate the Franchised Restaurant if: (1) we accept the new location; (2) you construct and equip a Franchised Restaurant at the new location in accordance with the then-current System standards and specifications; (3) a Franchised Restaurant at the new location is open to the public for business within 6 months after the loss of possession of the original franchised location; and (4) you reimburse us for all reasonable expenses actually incurred by us in connection with the acceptance of the new location.
Source: Item 12 — TERRITORY (FDD pages 54–56)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, franchisees must obtain prior written consent from Carls before relocating their franchised restaurant. This requirement is in place to ensure that any new location meets Carls's standards and strategic objectives.
The FDD outlines specific conditions under which a franchisee may relocate if they lose possession of their current premises through no fault of their own. In such cases, Carls will allow relocation if: (1) Carls accepts the new location; (2) the franchisee constructs and equips a restaurant at the new location according to Carls's current system standards; (3) the new restaurant opens within 6 months of losing possession of the original location; and (4) the franchisee reimburses Carls for all reasonable expenses incurred in accepting the new location.
These stipulations highlight the importance of site selection and lease negotiation for prospective Carls franchisees. Franchisees need to be aware that relocating a restaurant requires Carls's approval and adherence to specific criteria, which can involve significant costs and time. This is a fairly standard practice in franchising, as franchisors want to maintain brand consistency and ensure that new locations are viable and profitable.