Does Carls select the site for my franchised restaurant?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
We do not select the site for your Franchised Restaurant. You select the site for your Franchised Restaurant subject to our acceptance. As noted in Item 1, you should not acquire any interest in a site for your Franchised Restaurant until you have been approved as a franchisee (or, if you already are a franchisee, until you have been approved for expansion) and we have accepted the site in writing. We generally do not own the Franchised Restaurant premises and lease them to franchisees.
For each proposed site for a Franchised Restaurant, you will, if requested by us, submit a Franchise Site Application to us. In addition, you may have to submit a complete real estate package (containing that information as we may reasonably require) for a proposed site, which you reasonably believe conforms to our then-current site selection criteria, including demographic characteristics, traffic patterns, parking, character of the neighborhood, competition from other businesses in the area, the proximity to other businesses (including restaurants operated or franchised by CJR or our affiliates), the nature of other businesses in proximity to the site and other commercial characteristics (including the purchase price, rental obligations and other lease terms for the proposed site) and the size, appearance, other physical characteristics, and a site plan of the premises. Within 30 days after receipt of these documents, and any information which CJR may reasonably require, we will advise you in writing whether we have accepted a particular site; however, CJR has no obligation to review any development proposal if you or your affiliates are not in full compliance with all agreements with CJR or its affiliates. If we do not respond within that time period, we will be deemed not to have accepted the site. Our acceptance or refusal to accept a site for the Franchised Restaurant may be subject to reasonable conditions as determined in our sole discretion.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 41–54)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the franchisee is responsible for selecting the site for their franchised restaurant. However, this selection is subject to Carls's final acceptance. The FDD specifies that franchisees should not acquire any interest in a site until they have been approved as a franchisee and Carls has given written acceptance of the site.
To gain Carls's approval, franchisees must submit a Franchise Site Application and, if requested, a complete real estate package. This package should include information that aligns with Carls's site selection criteria, such as demographic characteristics, traffic patterns, parking availability, neighborhood character, competition, proximity to other businesses (including existing Carls restaurants), and the physical characteristics of the site, including purchase price, rental obligations, and a site plan. Carls will then review these documents and inform the franchisee in writing of their decision within 30 days. Failure to respond within this period is considered a rejection of the site.
Carls's acceptance of a site may come with certain conditions, determined at their discretion. While Carls provides site selection guidelines and consultation, their acceptance of a site does not guarantee any specific sales volume or profitability. The franchisee is responsible for securing the site by lease, sublease, or purchase within 6 to 9 months after Carls's acceptance. Construction must begin within 6 months after securing the site, and the restaurant must open within 18 months. Failure to meet these deadlines can result in the withdrawal of site acceptance or termination of the Franchise Agreement.