Under what condition is CJR not obligated to review any development proposal from a Carls franchisee?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
We will advise you in writing within 30 days after receipt of all documents that we require whether we have accepted a particular site; however, we have no obligation to review any development proposal if you or your affiliates are not in full compliance with all agreements with us or our affiliates. If we do not respond within that time period, we will be deemed not to have accepted the site. (Development Agreement, § 5.D.)
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, CJR, the franchisor, is not obligated to review any development proposal if a franchisee or their affiliates are not in full compliance with all agreements with CJR or its affiliates. This condition applies to the site selection process for a Franchised Restaurant.
This means that if a prospective Carls franchisee, or any business entities affiliated with them, has any outstanding issues or breaches of contract with Carls, the franchisor can refuse to consider any new location proposals. This could include failure to pay fees, not adhering to brand standards at an existing location, or any other violation of the franchise agreement or related agreements.
This stipulation underscores the importance of maintaining a strong and compliant relationship with Carls. Franchisees need to ensure they are meeting all contractual obligations to avoid delays or rejection of future development plans. It is a fairly standard practice in franchising for franchisors to require franchisees to be in good standing before approving new locations or expansions.