Is Carls Jr. allowed to change or improve the System that franchisees use?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee develops any new concepts, processes or improvements relating to the System, whether or not pursuant to a CJR authorized test, Franchisee promptly shall notify CJR and provide CJR with all information regarding the new concept, process or improvement, all of which shall become the property of CJR and its affiliates and which may be incorporated into the System without any payment to Franchisee.
Franchisee, at its expense, promptly shall take all actions deemed necessary or desirable by CJR to vest in CJR ownership of such concepts, processes or improvements.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. has the right to modify the System and expects franchisees to adapt to these changes. Specifically, if a franchisee develops any improvements to the System, they must notify Carls Jr., and those improvements become the property of Carls Jr., which may incorporate them into the System without compensating the franchisee.
Carls Jr. also requires franchisees to maintain and update their computer systems to ensure compatibility with Carls Jr.'s systems. Franchisees are responsible for the costs associated with these updates, changes, and modifications to their computer hardware and software. This includes keeping the computer system in good repair and making any necessary additions or replacements as directed by Carls Jr. Franchisees must also use security safeguards to protect data.
Furthermore, franchisees are obligated to maintain the Franchised Restaurant in first-class condition and repair, adhering to the System's requirements. This includes performing necessary remodeling, redecorating, refurbishing, and repairs as prescribed by Carls Jr., such as periodic painting, parking lot resurfacing, roof repairs, and replacement of outdated signage or equipment. Franchisees cannot make material alterations to the restaurant that affect operations or the image of the System without prior written approval from Carls Jr., ensuring uniformity and quality across all locations.