What alterations and modifications must a Carls Jr. franchisee make to the Franchised Location upon termination, and what happens if they fail to do so?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- F. Unless CJR directs Franchisee to temporarily maintain the existing appearance of the Franchised Location while CJR determines if it will exercise its option under Section 23, Franchisee promptly shall make such alterations and modifications to the Franchised Location as may be necessary to clearly distinguish to the public the Franchised Location from its former appearance and also make those specific additional changes as CJR may request for that purpose. If Franchisee fails to promptly make these alterations and modifications, CJR shall have the right (at Franchisee's expense, to be paid upon Franchisee's receipt of an invoice from CJR) to do so without being guilty of trespass or other tort.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, after termination of the franchise agreement, the franchisee must promptly make alterations and modifications to the Franchised Location to clearly distinguish it from its former appearance as a Carls Jr. restaurant. These changes should be sufficient to remove any impression that the location is still associated with the Carls Jr. brand. Carls Jr. may also request specific additional changes for this purpose.
If the franchisee fails to promptly make these required alterations and modifications, Carls Jr. has the right to make the changes themselves. The franchisee will be responsible for covering all expenses incurred by Carls Jr. in performing these alterations. Carls Jr. will provide an invoice to the franchisee for these costs, which the franchisee is obligated to pay upon receipt.
This clause ensures that upon termination, a former franchisee cannot continue to benefit from the Carls Jr. brand's goodwill or create confusion among customers. It also protects the integrity of the Carls Jr. brand by ensuring that terminated locations are appropriately rebranded or modified to avoid any association with the franchise. The franchisee bears the financial risk of non-compliance, as Carls Jr. can step in and charge the franchisee for the necessary modifications.