Under what condition is the initial franchise fee for a Carls restaurant reduced to $15,000?
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 standard initial franchise fee is $25,000. However, Carls offers a reduced initial franchise fee of $15,000 under specific circumstances.
The reduced fee applies when a franchisee develops a restaurant under the terms of a Development Agreement with Carls. A Development Agreement is an agreement where the franchisee commits to developing multiple Carls restaurants, with a minimum of three.
In practice, this means that if a prospective franchisee signs a Development Agreement to open multiple Carls restaurants, the balance of the initial franchise fee due to CJR is reduced to $15,000 for each restaurant developed under that agreement. The franchisee must pay the initial franchise fee, less any Development Fee already paid, when they execute the Franchise Agreement. The initial franchise fee is fully earned by CJR when paid and is non-refundable.