Is CKE Restaurants Holdings, Inc. a party to any agreement that Carls Jr. signs with its franchisees?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Also attached as Exhibit J are the audited consolidated financial statements for CJR's indirect corporate parent, CKE Restaurants Holdings, Inc. ("CKR") (formerly known as CKE Restaurants, Inc.), which comprise (1) consolidated balance sheets as of January 27, 2025 and January 29, 2024, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for the fiscal years then ended, and the related notes to the consolidated financial statements; and (2) consolidated balance sheets as of January 29, 2024 and January 30, 2023, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for the fiscal years then ended, and the related notes to the consolidated financial statements. As noted in Item 1, CKR will be providing required support and services to franchisees under a Management Agreement with us. CKR's financial statements are being provided for disclosure purposes only. CKR is not a party to any agreement that we sign with franchisees, nor does CKR guarantee our obligations under any agreement that we sign with franchisees.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, CKE Restaurants Holdings, Inc. (CKR) is not a party to any agreement that Carls Jr. Restaurants LLC (CJR) signs with its franchisees. The FDD states that CKR will provide required support and services to franchisees under a Management Agreement with CJR. CKR's financial statements are included in the FDD for disclosure purposes only.
This means that while CKR, the indirect corporate parent, provides support to Carls Jr. franchisees through a management agreement with CJR, the legal obligations and responsibilities of the franchise agreement rest solely with CJR. Franchisees will not have a direct contractual relationship with CKR.
This distinction is important because it clarifies which entity is legally responsible for upholding the terms of the franchise agreement. In the event of a dispute or breach of contract, the franchisee would pursue action against CJR, not CKR. Prospective franchisees should understand this relationship and consider the financial stability and resources of CJR when evaluating the franchise opportunity.