Under what conditions might Carls refuse to accept a proposed site for a Carls restaurant?

o review any development proposal if you or your affiliates are not in full compliance with all agreements with CJR or its affiliates. If we do not respond within that time period, we will be deemed not to have accepted the site. Our acceptance or refusal to accept a site for the Franchised Restaurant may be subject to reasonable conditions as determined in our sole discretion.

We may refuse to accept a site for a proposed Franchised Restaurant unless you demonstrate sufficient financial capabilities, in our sole judgment, applying standards consistent with criteria we use to establish Carl's Jr. Restaurants in other comparable market areas, to properly develop, operate and maintain the Franchised Restaurant. Therefore, you also must furnish us with such financial statements and other information regarding you and the development and operation of the proposed Franchised Restaurant, including, without limitation, investment and financing plans for the proposed Franchised Restaurant, as we reasonably may require.

Our acceptance of one or more sites is not a representation or a promise by CJR that a Franchised Restaurant at an accepted site will achieve a certain sales volume or a certain level of profitability. Similarly, our acceptance of one or more sites and our refusal to accept other sites is not a representation or a promise that an accepted site will have a higher sales volume or be more profitable than a site which we did not accept. Our acceptance only indicates our willingness to be represented by you at that site.

Following our acceptance of a site, you must secure the site by entering into a lease or sublease for the site or purchasing the real property. This must be finalized no later than 6 to 9 months after our site acceptance ("Property Control Date"). If you do not do so by the Property Control Date, the site acceptance will be deemed withdrawn without providing you notice. Y must commence construction within 6 months after the Property Control Date. If you fail to do so, site acceptance will be deemed withdrawn without providing you notice. You may not commence construction until we have a fully-executed Franchise Agreement with you and you have paid us the Initial Franchise Fees. You must open the Franchised Restaurant within 18 months after the Property Control Date. If you fail to open the Franchised Restaurant within 18 months after the Property Control Date, we will have the right to terminate the Franchise Agreement.

Time Between Agreement Signing and Opening

The typical length of time between the Property Control Date and the opening of the Franchised Restaurant is between 12 and 18 months. Factors affecting the length of time needed to open the Franchised Restaurant usually include your ability to obtain adequate financing, weather, local requirements and procedures for necessary permits and zoning, shortages or delayed installation of equipment, signs and fixtures and special circumstances affecting construction in a particular area, none of which are within our control.

Training

We may require those individuals who will have a 10% or greater interest in the franchisee entity to attend a 10-Day Operations Overview before we will commit to enter into any other agreement with you. The 10-Day Operations Overview will be conducted at those locations specified by us. As described in Item 5, we may charge a fee for this program, and you will be required to pay all travel, living and other expenses incurred in attending this program. The persons participating in the 10-Day Operations Overview will be required to execute the Preliminary Agreement.

We currently provide, at no charge for you, your Operating Principal (if not previously trained), your General Manager and 6 other employees who you have hired as Shift Leaders, the FMTP, provided the training takes place within 2 years of your signing the Franchise Agreement, in the operation of a Carl's Jr. Restaurant at those times and places designated by us. We reserve, however, the right to modify or waive the training required based on individual's or your experience. As described in Item 5, a fee is charged to provide the FMTP to additional individuals. The FMTP will include in-restaurant training at a Carl's Jr. Restaurant designated by us, classroom instruction and training at a designated training facility in Anaheim, CA or Franklin, TN, and online training.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 41–54)