Can CJR develop and operate restaurants other than Carls Jr. Restaurants in the Development Territory?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
CJR reserves to itself the rights to: (A) operate and license others to operate Carl's Jr. Restaurants in the Development Territory that are located in travel plazas, gas stations or convenience stores; (B) operate and license others to operate Carl's Jr. Restaurants in the Development Territory that are located in airports, train stations, bus stations, toll plazas, stadiums, arenas, convention centers, military facilities, schools, colleges, universities, hospitals, recreational theme parks, business or industrial foodservice venues, venues in which foodservice is or may be provided by a master concessionaire or contract foodservice provider, Indian reservations, casinos, "ghost" or "dark" kitchens or any similar captive or non-traditional "brick and mortar" locations (collectively, Captive Market Locations"); (C) award national or regional licenses to third parties to sell products under the Proprietary Marks in foodservice facilities primarily identified by the third party's trademark; (D) develop and operate, and license others to develop and operate, restaurants other than Carl's Jr. Restaurants in the Development Territory; (E) merchandise and distribute products identified by some or all of the Proprietary Marks in the Development Territory through any other method or channel of distribution; and (F) sell and distribute products identified by some or all of the Proprietary Marks in the Development Territory to restaurants other than Carl's Jr. Restaurants, provided those restaurants are not licensed to use the Proprietary Marks in connection with their retail sales.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. reserves the right to develop, operate, and license others to develop and operate restaurants other than Carls Jr. restaurants within the Development Territory. This means that even if a developer is granted rights to develop Carls Jr. restaurants in a specific area, Carls Jr. can still operate or allow others to operate different types of restaurants in the same territory.
This reservation of rights allows Carls Jr. to diversify its business and explore other restaurant concepts without being restricted by the agreements with its Carls Jr. developers. It also enables Carls Jr. to capitalize on opportunities that may not be suitable for a Carls Jr. restaurant but could be successful under a different brand or format. This could include fast-casual concepts, ethnic cuisines, or other specialized dining experiences.
For a prospective Carls Jr. developer, this clause means that they will not have exclusive rights to all restaurant operations within their development territory. Carls Jr. retains the flexibility to introduce other restaurant brands or concepts that could potentially compete with the Carls Jr. restaurants being developed. Therefore, it is crucial for developers to carefully evaluate the market and competitive landscape, understanding that Carls Jr. may introduce other restaurant concepts in the same area.