Can CJR approve a supplier for only certain goods or materials for a Carls Jr. franchise?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
CJR may approve one or more suppliers for any goods or materials and may approve a supplier only as to certain goods or materials. CJR may concentrate purchases with one or more suppliers to obtain lower prices and/or the best advertising support and/or services for any group of Carl's Jr. Restaurants or any other group of restaurants franchised or operated by CJR or its affiliates. Approval of a supplier may be conditioned on requirements relating to the frequency of delivery, reporting capabilities, standards of service, including prompt attention to complaints, or other criteria, and concentration of purchases, as set forth above, and may be temporary pending a further evaluation of such supplier by CJR. CJR may establish commissaries and distribution facilities owned and operated by CJR or an affiliate that CJR shall designate as an approved supplier.
If Franchisee proposes to purchase any goods or materials (that Franchisee is not required to purchase from CJR, an affiliate of CJR or a designated supplier) from a supplier that CJR has not previously approved, Franchisee shall submit to CJR a written request for such approval, or shall request the supplier to do so itself. CJR has the right to require, as a condition of its approval, that its representatives be permitted to inspect the supplier's facilities, and that such information, specifications and samples as CJR reasonably designates be delivered to CJR and/or to an independent, certified laboratory designated by CJR for testing prior to granting approval. A charge not to exceed the reasonable cost of the inspection and the actual cost of the test shall be paid by Franchisee. CJR reserves the right, at its option, to re-inspect the facilities and products of any such approved supplier and to revoke its approval upon the suppliers' failure to continue to meet any of the foregoing criteria.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, CJR has the authority to approve suppliers for specific goods or materials. This means that a supplier might be approved to provide only certain items to Carls Jr. franchisees, rather than being an approved supplier for everything.
This approach allows Carls Jr. to concentrate purchases with particular suppliers to potentially secure better pricing, advertising support, or services for its franchisees. The approval of a supplier can be conditional, depending on factors such as delivery frequency, reporting capabilities, service standards (including addressing complaints), and purchase volume. Approvals can also be temporary while CJR further evaluates the supplier. CJR also retains the option to establish its own commissaries and distribution facilities, or those of an affiliate, to act as approved suppliers.
If a franchisee wishes to use a supplier not already approved by Carls Jr. for goods or materials they aren't required to purchase directly from CJR or a designated supplier, the franchisee must seek approval from CJR. As part of the approval process, Carls Jr. may require inspections of the supplier's facilities and submission of information, specifications, and samples for testing. The franchisee will bear the costs associated with these inspections and tests. Carls Jr. also reserves the right to re-inspect approved suppliers and revoke approval if they fail to continue meeting the required criteria.