Does Carls require franchisees to lease their restaurant location from them or an affiliate?

According to Carls's 2024 Franchise Disclosure Document, franchisees are not required to lease their restaurant location from Carls or an affiliate. However, Carls must consent to the franchisee's selection of the site for their Carls restaurant. If the franchisee chooses to lease the premises from a third-party landlord, they must sign the Franchise Lease Addendum, which is attached as Appendix G to the Franchise Agreement.

This means that while Carls does not mandate leasing from them or their affiliates, they retain control over site selection. A prospective franchisee needs to find a location that meets Carls's approval. The requirement to sign a Franchise Lease Addendum when leasing from a third party indicates that Carls has specific requirements and stipulations that need to be incorporated into the lease agreement.

This policy provides franchisees with some flexibility in choosing their location and negotiating lease terms with landlords, but it also ensures that Carls maintains brand consistency and operational standards by approving the site and setting lease requirements. Franchisees should carefully review Appendix G of the Franchise Agreement to understand the specific terms and conditions that must be included in their lease agreement with a third-party landlord.