Can Carls restrict the sales of menu items to certain time periods?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
You must offer for sale and sell at the Franchised Restaurant all and only those products and services as are expressly authorized by us in the OPM or otherwise in writing. We may restrict sales of menu items to certain time periods during the day. We have the right to change the menu items, ingredients, products, materials, supplies and paper goods or the standards and specifications of each, and there are no limits on our ability to do so. You must promptly comply with the new requirements. We do not limit the customers to whom you may sell goods or services. You must offer to customers online ordering and delivery services pursuant to online ordering/delivery programs that we may from time to time establish with approved vendors and comply with our specifications regarding same.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 61)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, Carls has the authority to restrict the sales of menu items to specific time periods during the day. This means that Carls can dictate when certain products are available for sale at the franchised restaurant. The franchisee must begin selling newly authorized menu items and stop selling menu items that are no longer authorized within 30 days after receiving written notice from Carls. All food, beverage, and merchandise items authorized for sale at the Franchised Restaurant must be offered for sale under the specific name designated by Carls.
This control allows Carls to manage its brand consistency and adapt to market demands or supply chain considerations. For a franchisee, this means they must be prepared to adjust their offerings based on Carls's decisions, which could impact sales and require operational adjustments. While the franchisee can suggest new menu items or changes, Carls has the final say on what is offered.
Furthermore, if Carls introduces a new menu item that requires additional equipment, the franchisee is responsible for purchasing it. However, Carls will provide a reasonable timeframe for financing, purchasing, and installing the necessary equipment before the new menu items must be available for sale. The franchisee also needs to purchase any additional equipment and smallwares as Carls deems reasonably necessary in connection with new menu items. This ensures that all locations maintain a consistent standard and can properly serve the approved menu items.