Does Carls have the right to change supplies?
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.
CJR has the right to require that Franchisee use only certain brands and to prohibit Franchisee from using other brands. CJR may from time to time modify the
list of approved brands and/or suppliers, and Franchisee shall not, after receipt of such modification in writing, reorder any brand from any supplier that is no longer approved.
Approximately 90% of your purchases or leases of fixtures, furnishings, equipment, décor, signs, food items, ingredients, supplies and other products in connection with the establishment of the Franchised Restaurant must be purchased in accordance with our specifications or from approved suppliers. We estimate that these items represent approximately 65% of your controllable purchases, excluding labor and general administrative costs in connection with the ongoing operation of the Franchised Restaurant.
We may concentrate purchases with one or more suppliers to obtain lower prices and/or the best advertising support and/or services for any group of Carl's Jr. Restaurants or any other group of restaurants operated or franchised by CJR or our affiliates. Although you are not required to lease a location from us or an affiliate, we must consent to your selection of the site for your Carl's Jr. Restaurant. If you lease the Restaurant premises from a third party landlord, you must sign the Franchise Lease Addendum attached as Appendix G to the Franchise Agreement.
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 right to change the menu items, ingredients, products, materials, supplies, and paper goods, including their standards and specifications. There are no limits on Carls's ability to make these changes, and franchisees must promptly comply with any new requirements.
Carls also has the right to modify the list of approved brands and/or suppliers. Franchisees are prohibited from reordering any brand from a supplier that is no longer approved after receiving written notification of the modification. Franchisees must purchase food products developed by Carls from Carls, its affiliates, or a designated third party. For all other goods, food products, ingredients, spices, materials, supplies, and cleaning products, franchisees must purchase from manufacturers, distributors, vendors, and suppliers approved by Carls.
Approximately 90% of a franchisee's purchases related to fixtures, furnishings, equipment, décor, signs, food items, ingredients, supplies, and other products must be made according to Carls's specifications or from approved suppliers. Carls may concentrate purchases with one or more suppliers to obtain lower prices, better advertising support, or services. Carls also reserves the right to limit the number of suppliers who deliver products at negotiated prices and terms.