In which states did Carls restaurants cease operations for reasons other than termination, non-renewal, or reacquisition by the franchisor during 2024?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
to New Owners (Other than to CJR, Its Predecessor or Their Affiliates) For Fiscal Years 2022-2024(1) (2) ***
| State | Year | Number of Transfers | |---|---|---| | CA | 2022 | 0 | | | 2023 | 1 | | | 2024 | 0 | | UT | 2022 | 0 | | | 2023 | 1 | | | 2024 | 0 | | TOTAL | 2022 | 0 | | | 2023 | 2 | | | 2024 | 0 | *The Restaurants included in this table are also included in the preceding table.
Table No. 3 Status of Franchised Restaurants For Fiscal Years 2022-2024(1) (2)
| State | Year | Restaurants at Start of the Year | Restaurants Opened | Terminations | Non- Renewals | Reacquired by Franchisor | Ceased Operations – Other Reasons | Restaurants at End of the Year |
|---|---|---|---|---|---|---|---|---|
| AK | 2022 | 4 | 0 | 0 | 0 | 0 | 0 | 4 |
| 2023 | 4 | 0 | 0 | 0 | 0 | 0 | 4 | |
| 2024 | 4 | 0 | 0 | 0 | 0 | 0 | 4 | |
| AZ | 2022 | 70 | 0 | 0 | 1 | 0 | 0 | 69 |
| 2023 | 69 | 1 | 0 | 0 |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–79)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, several states experienced restaurant closures for reasons other than termination, non-renewal, or reacquisition by the franchisor. Specifically, California saw 3 restaurants close for other reasons, resulting in a decrease from 218 to 215 locations. Idaho had 1 restaurant close for other reasons, decreasing from 20 to 19 locations. Oklahoma saw 2 restaurants close for other reasons, decreasing from 38 to 36 locations. Oregon had 1 restaurant close for other reasons, decreasing from 1 to 0 locations. Texas also had 1 restaurant close for other reasons, decreasing from 32 to 30 locations.
These figures are detailed in Item 20 of the FDD, which provides comprehensive data on outlet and franchisee information. The table includes a breakdown by state and year, listing the number of restaurants at the start of the year, restaurants opened, terminations, non-renewals, restaurants reacquired by the franchisor, restaurants that ceased operations for other reasons, and the number of restaurants at the end of the year. This information is crucial for prospective franchisees as it offers insights into the stability and performance of the franchise system in different geographic areas.
The data indicates that while some states maintained consistent numbers of restaurants, others experienced fluctuations due to closures for various reasons. For example, Arizona, Colorado, and Hawaii did not report any closures for 'other reasons' in 2024. In contrast, California, Idaho, Oklahoma, Oregon and Texas experienced such closures, which could be attributed to factors like economic conditions, local market saturation, or specific operational challenges faced by franchisees in those regions.
It is important for potential franchisees to investigate the reasons behind these 'other' closures to understand the potential risks and challenges associated with operating a Carls franchise in specific states. Further due diligence, including discussions with current and former franchisees, can provide valuable context and help in making an informed investment decision. Additionally, reviewing Exhibit H of the FDD, which lists franchisees that closed or transferred franchised restaurants, may offer more specific details about these closures.