Under the Carls Development Agreement, will I receive an exclusive territory?

According to Carls's 2024 Franchise Disclosure Document, under the Development Agreement, you will not receive an exclusive territory. Carls outlines that franchisees may face competition from other franchisees, outlets that Carls owns, or other channels of distribution or competitive brands that Carls controls. However, if you sign a Development Agreement, you will receive a Development Territory, which will be mutually agreed upon by CJR and you, taking into consideration the density of the area and the number of Franchised Restaurants you agree to develop.

The Development Territory's perimeters may be described by specific street boundaries, county lines, state lines, municipal boundaries, railroad tracks, or other similar boundary descriptions. The size may range from a portion of a metropolitan area to a county or a state in less densely populated areas. Carls requires prior written acceptance of each site for a Franchised Restaurant, which will be based on their then-current standards for sites for Carl's Jr.

Carls retains significant rights within the Development Territory. They can operate or license others to operate Carl's Jr. Restaurants in locations such as travel plazas, gas stations, convenience stores, airports, train stations, bus stations, toll plazas, stadiums, arenas, convention centers, military facilities, schools, colleges, universities, hospitals, recreational theme parks, business or industrial foodservice venues, venues in which foodservice is or may be provided by a master concessionaire or contract foodservice provider, Indian reservations, casinos, "ghost" or "dark" kitchens, or any similar captive market location or non-traditional "brick and mortar" location. Carls can also award national or regional licenses to third parties to sell products under their trademarks in foodservice facilities primarily identified by the third party's trademark.

These restrictions apply only to CJR and do not apply to Carl's Jr. Restaurants in operation in the Development Territory as of the date of the Development Agreement. Continuation of the limited restrictions on Carls's ability to operate and license others to operate Carl's Jr. Restaurants in the Development Territory does not depend on your achieving a certain sales volume, market penetration, or other contingency. However, if you are in default under the Development Agreement or any Franchise Agreement, Carls may terminate the Development Agreement and your limited rights in the Development Territory. There are no other circumstances in which Carls can unilaterally modify your limited rights in the Development Territory.