Under what circumstances must a Carls franchisee designate and retain a Multi-Unit Development Manager?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
residence within a reasonable driving distance of the Development Territory, unless waived in writing by us. The Development Principal will be required to successfully complete our development training and any additional training required by us. If you are developing restaurants in multiple markets that are franchised by us or our affiliates, an individual meeting the above qualifications will serve as the Development Principal in at least one market.
If you are developing Franchised Restaurants in multiple geographic markets, for all markets in which the Development Principal fails to satisfy our requirements, you must designate and retain an individual to serve as Multi-Unit Development Manager. The Multi-Unit Development Manager will be under the supervision of the Development Principal. The Multi-Unit Development Manager must devote full time and best efforts to supervising the development of the Franchised Restaurants and other restaurants that are to be operated by you that are franchised by us or our affiliates in a geographic market, successfully complete our development training, the FMTP and any additional training required by us, and be approved by us. In addition, the Multi-Unit Development Manager must maintain his/her primary residence within a reasonable driving distance of the Development Territory, unless waived in writing by us.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 59–61)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, a franchisee developing franchised restaurants in multiple geographic markets must designate and retain a Multi-Unit Development Manager if the Development Principal fails to meet Carls's requirements in those markets. This manager will operate under the supervision of the Development Principal.
The Multi-Unit Development Manager is required to commit their full time and best efforts to overseeing the development of Carls restaurants, including those franchised by Carls or its affiliates, within a specific geographic market. They must also successfully complete Carls's development training, the FMTP (Franchise Management Training Program), and any additional training that Carls requires. Furthermore, Carls must approve the designated manager. Unless waived in writing by Carls, the Multi-Unit Development Manager must live within a reasonable driving distance of the Development Territory.
Unless a Multi-Unit Development Manager has been named and approved by Carls, the Development Principal must devote their full time and best efforts to supervising the development of the Franchised Restaurants and maintain their primary residence within a reasonable driving distance of the Development Territory, unless waived in writing by Carls. The Development Principal must own at least a 10% equity ownership interest, be part of the Continuity Group, and have full control over the day-to-day development of the Franchised Restaurants.