Besides the royalty fee, what other amounts must a Carls Jr. franchisee pay to CJR?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
ures, equipment, signs, computer terminals and related equipment, supplies and other items has been accomplished.
- G. CJR has determined that: (1) CJR's Franchise Management Training Program has been successfully completed by the minimum number of Franchisee's employees required by CJR; and (2) Franchisee has hired and trained a sufficient number of staff in accordance with CJR's standards and the requirements of the System and this Agreement.
- H. CJR has been furnished with copies of all insurance policies required by Section 15 or such other evidence of insurance coverage and payment of premiums as CJR reasonably may request.
- I. If not previously paid, Franchisee has paid CJR the balance of the Initial Franchise Fee required by this Agreement and the opening training support team fee as required by CJR.
- J. Provided all of the preceding conditions have been met, CJR will notify Franchisee of its approval to open the Franchised Restaurant. Notwithstanding the foregoing, CJR has the right to waive any of the foregoing conditions.
6. FEES
A. Initial Franchise Fee
Franchisee agrees to pay CJR an Initial Franchise Fee in the amount specified in Appendix A upon its execution of this Agreement. Any Development Fee previously paid by Franchisee to CJR with respect to the Franchised Restaurant shall be credited against the Initial Franchise Fee. Franchisee acknowledges and agrees that the Initial Franchise Fee is paid in consideration of CJR initially granting this Franchise, it was fully earned at the time paid, and it is not refundable for any reason whatsoever.
B. Royalty Fee
In addition to all other amounts to be paid by Franchisee to CJR, Franchisee shall pay CJR a nonrefundable and continuing royalty fee in an amount set forth in attached Appendix B for the right to use the System and the Proprietary Marks at the Franchised Location. If any taxes, fees or assessments are imposed on CJR by reason of its acting as franchisor or licensing the Proprietary Marks under this
Agreement, Franchisee shall reimburse CJR the amount of those taxes, fees or assessments within 10 days after receipt of an invoice from CJR.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, franchisees are subject to several fees beyond the royalty fee. These include an initial franchise fee, the amount of which is specified in Appendix A of the franchise agreement. This fee is non-refundable and is earned by Carls Jr. upon the execution of the agreement.
In addition to the initial franchise fee, Carls Jr. franchisees must also pay advertising fees. These fees can total up to 7% of the restaurant's gross sales. The exact amount and allocation of these advertising fees are detailed in Section 8 and Appendix C of the franchise agreement. These advertising fees are allocated towards the Production Fund and the Media Fund. The Production Fund is used for creating advertising and marketing programs, while the Media Fund is likely used for placing advertisements.
Carls Jr. franchisees may also incur costs for development training, with tuition fees established by Carls Jr. from time to time for each person attending. Furthermore, if a franchisee fails to provide necessary records or reports, Carls Jr. may access the franchisee's books and records to prepare them, with the franchisee responsible for reimbursing Carls Jr. for all associated costs and expenses. Franchisees may also be required to reimburse Carls Jr. for any taxes, fees, or assessments imposed on Carls Jr. due to its role as franchisor or licensor of the proprietary marks. Franchisees are also required to participate in customer satisfaction programs and reimburse Carls Jr. for all costs related to their restaurant associated with these programs. Finally, a renewal fee of $5,000 for a 5-year term or $10,000 for a 10-year term is required to renew the franchise agreement.