What is the standard initial franchise fee for a Carls restaurant?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
chise Agreement in use at the time you enter
into a lease or sublease for, or take fee title to, the real property upon which the Franchised Restaurant will be developed.
Initial Franchise Fee
The Initial Franchise Fee is $25,000, although the balance of the Initial Franchise Fee due to CJR is reduced to $15,000 for a Restaurant developed pursuant to the terms of a Deve
Source: Item 5 — INITIAL FEES (FDD pages 24–26)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the initial franchise fee is $25,000. However, if the franchisee enters into a Development Agreement, this fee is reduced. A Development Agreement requires the franchisee to develop multiple Carls restaurants.
If a franchisee develops a restaurant under the terms of a Development Agreement, the balance of the initial franchise fee due to Carls is reduced to $15,000. This means that $10,000 of the initial $25,000 fee is waived. This reduction incentivizes franchisees to commit to developing multiple locations.
The initial franchise fee is paid when the Franchise Agreement is executed. Once paid, the initial franchise fee is considered fully earned by Carls and is non-refundable. This is a standard practice in franchising, as the fee compensates the franchisor for the initial costs of granting the franchise and providing initial support.