Under what condition is a Carls franchisee required to designate and retain a Multi-Unit Manager?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee operates restaurants that are franchised by CJR or its affiliates in multiple geographic markets, for all markets in which the Operating Principal fails to satisfy the requirements of Section 16.G.,
Franchisee shall designate and retain an individual to serve as Multi-Unit Manager. The Multi-Unit Manager shall be under the supervision of the Operating Principal. The Multi-Unit Manager shall meet all of the following qualifications:
- (1) The Multi-Unit Manager shall devote full time and best efforts to supervising the operation of the Franchised Restaurant and those other restaurants (that are franchised by CJR or its affiliates) operated by Franchisee in the same geographic market and shall not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility.
- (2) Unless waived in writing by CJR, the Multi-Unit Manager shall maintain his primary residence within a reasonable driving distance of the Franchised Restaurant.
- (3) The Multi-Unit Manager shall successfully complete the FMTP and any additional training required by CJR.
- (4) CJR shall have approved the Multi-Unit Manager, and not have later withdrawn that approval.
If the Multi-Unit Manager no longer qualifies as such, Franchisee shall designate another qualified person to act as Multi-Unit Manager within 30 days after the date the prior Multi-Unit Manager ceases to be qualified. Franchisee's designee to become the Multi-Unit Manager must successfully complete the FMTP and any additional training required by CJR.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, a franchisee is required to designate and retain a Multi-Unit Manager under specific conditions related to operating restaurants in multiple geographic markets and the qualifications of the Operating Principal. If a Carls franchisee operates restaurants franchised by Carls or its affiliates in multiple geographic markets, they must designate and retain a Multi-Unit Manager for all markets where the Operating Principal does not meet the requirements outlined in Section 16.G of the franchise agreement.
The Multi-Unit Manager is responsible for supervising the operation of the franchised restaurant and other restaurants franchised by Carls or its affiliates within the same geographic market. This individual must devote their full time and best efforts to this role and cannot engage in other business activities that require substantial management responsibility. Unless Carls provides a written waiver, the Multi-Unit Manager must also maintain their primary residence within a reasonable driving distance of the franchised restaurant.
Furthermore, the Multi-Unit Manager must successfully complete the Franchise Management Training Program (FMTP) and any additional training required by Carls. The franchisor, Carls, must approve the Multi-Unit Manager, and this approval cannot be later withdrawn. If the Multi-Unit Manager no longer meets the qualifications, the franchisee is required to designate another qualified person within 30 days, who must also complete the FMTP and any additional training. The Multi-Unit Manager operates under the supervision of the Operating Principal, ensuring compliance with Carls's operating standards.