Under the Carls TR Development Agreement, is a developer allowed to make binding commitments to purchase or lease a site before receiving written acceptance from CJR?

According to Carls's 2024 Franchise Disclosure Document, a developer operating under the TR Development Agreement is explicitly prohibited from making any binding commitments to purchase or lease a site before receiving written acceptance from Carls. This restriction is in place to ensure that all sites meet Carls's standards and criteria before the developer incurs any financial obligations.

This requirement means that prospective Carls developers must first have a site approved by Carls in writing before signing any lease agreements or purchase contracts. This process protects both the developer and Carls by ensuring that the location is suitable for a Carls restaurant. The developer bears the responsibility for all costs, liabilities, and expenses related to locating, obtaining, and developing sites, as well as constructing and equipping the restaurants according to Carls's standards.

Carls provides site selection assistance, including site selection guidelines and consultation, and may conduct site evaluations. However, the developer is ultimately responsible for conducting due diligence and validation with their own advisors. Carls's consent confirms that the site meets their current criteria, but it does not guarantee the restaurant's success.

Therefore, a potential Carls developer needs to factor in the time required for site approval into their development timeline and avoid making premature financial commitments. This policy is designed to mitigate risks associated with unsuitable locations and ensure that all Carls restaurants uphold the brand's reputation and standards.