May Carls Jr. charge testing and/or inspection fees to non-approved suppliers?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
on logistics. As a result, we and our affiliates reserve the right to recover our costs related to performing these services by collecting a per-case distribution fee for all cases sold by an approved supplier to our franchisees and from other logistics-related programs.
We may charge non-approved suppliers reasonable testing and/or inspection fees.
If you propose to purchase any goods or materials (that you are not required to purchase from CJR, an affiliate of CJR or a designated supplier) from a supplier that we have not previously approved, you must submit to us a written request for such approval, or you must request that the supplier do so. We have the right to require, as a condition of approval, that our representatives be permitted to inspect the supplier's facilities and that such information, specifications and samples as we reasonably designate be delivered to us and/or to an independent, certified laboratory designated by us for testing prior to granting approval. You must pay a fee not to exceed the reasonable cost of the inspection and the actual cost of the test. In addition to product testing, a facility audit may be required. We will notify you within 60 days as to whether you are authorized to purchase such products from that supplier. In the event we tentatively approve a request for an alternative supplier, you must submit a check for $1,500 to us as a deposit against the cost we incur in inspecting the supplier's facility. You will be responsible for additional costs and expenses associated with the inspection of the facility, which must occur before final approval. Approval of a supplier also may be subject to the frequency of delivery, reporting capabilities, standards of service (including prompt attention to complaints) or other criteria (including the number of suppliers already approved) and may be temporary pending fur
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 37–41)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. has the right to charge reasonable testing and/or inspection fees to non-approved suppliers. If a franchisee proposes to purchase goods from a supplier not already approved by Carls Jr., the franchisee must submit a written request for approval, or ensure the supplier does so.
As a condition of approval, Carls Jr. can require its representatives to inspect the supplier's facilities and demand that specific information, specifications, and samples be delivered for testing to either Carls Jr. or an independent, certified laboratory. The franchisee is responsible for covering the costs associated with the inspection and testing. In the event of tentative approval, the franchisee must submit a $1,500 deposit to cover inspection costs, with additional expenses being the franchisee's responsibility.
Carls Jr. will notify the franchisee of the approval decision within 60 days. Approvals may be subject to various criteria, including delivery frequency, reporting capabilities, service standards, sanitation standards, facility standards, insurance, and purchase concentration. These approvals can be temporary and subject to further evaluation. Carls Jr. may also periodically require repeat testing and facility audits at the franchisee's expense to ensure ongoing compliance with specifications and standards. Carls Jr. will provide written notice if any approvals are revoked.