What agreements must a Carls Jr. franchisee not be in default under to be authorized to open?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Franchisee shall not be in default under this Agreement or any other agreements between Franchisee and CJR or its affiliates; Franchisee shall not be in default beyond the applicable cure period under any real estate lease, equipment lease or financing instrument relating to the Franchised Restaurant; Franchisee shall not be in default beyond the applicable cure period with any vendor or supplier to the Franchised Restaurant; and, for the 12 months before the date of Franchisee's notice and the 12 months before the expiration of the Initial Term, Franchisee shall not have been in default beyond the applicable cure period under this Agreement or any other agreements between Franchisee and CJR or its affiliates.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee must not be in default under several agreements to be eligible for a renewal term. Specifically, the franchisee must not be in default under the current franchise agreement or any other agreements with CJR or its affiliates.
Additionally, the franchisee must not be in default beyond the applicable cure period for any real estate lease, equipment lease, or financing instrument related to the franchised restaurant. This encompasses all financial obligations and legal agreements tied to the physical location and necessary equipment for operating the Carls Jr. franchise.
Furthermore, the franchisee must not be in default beyond the applicable cure period with any vendor or supplier to the franchised restaurant. This condition ensures that the franchisee maintains good standing with all suppliers necessary for the restaurant's operation. For the 12 months before the date of the franchisee's notice and the 12 months before the expiration of the initial term, the franchisee must not have been in default beyond the applicable cure period under the franchise agreement or any other agreements with CJR or its affiliates. This requirement emphasizes consistent compliance over the long term to ensure renewal eligibility.