Does the Carls Jr. agreement require the proposed transferee to submit a franchise application?

According to the 2025 Carls Jr. Franchise Disclosure Document, if a developer (franchisee) wishes to transfer their rights under the Development Agreement, the proposed transferee is required to submit a franchise application. Specifically, the developer must advise CJR (Carls Jr.) in writing of any proposed transfer and ensure that the proposed transferee submits a franchise application.

This requirement ensures that Carls Jr. has the opportunity to evaluate the proposed transferee's qualifications to become a franchisee. Carls Jr. will assess whether the proposed transferee meets the brand's standards for operational experience, management, character, and financial resources. The decision to approve or deny the transfer is at Carls Jr.'s sole discretion, based on factors they deem relevant.

This process is typical in franchising, as franchisors want to maintain consistent brand standards and ensure that new franchisees are capable of running successful locations. The application allows Carls Jr. to gather necessary information and assess the transferee's suitability. The developer is also required to submit copies of all contracts, agreements, proposals, and any other information requested by Carls Jr. related to the proposed transfer.

If Carls Jr. consents to the transfer, both the transferor (current franchisee) and the transferee must execute an assignment agreement and any necessary amendments to the Development Agreement. This ensures that all parties are aligned with the terms and conditions of the transfer and that Carls Jr.'s rights are protected.