What condition must a Carls Jr. franchisee meet to maintain their license in good standing?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as reserved in the preceding paragraph, CJR will not, during the Development Term, operate or license others to operate Carl's Jr. Restaurants in the Development Territory, provided Developer is in compliance with the terms of this Agreement and any other agreements with CJR or its affiliates and is current on all obligations due CJR and its affiliates.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a developer must be in compliance with the terms of their agreement and any other agreements with CJR or its affiliates and be current on all obligations due CJR and its affiliates to maintain their license in good standing. This ensures that the developer adheres to the standards and requirements set forth by Carls Jr.
This compliance is crucial for the developer to maintain the limited exclusive rights granted by CJR. If the developer fails to meet these obligations, Carls Jr. reserves the right to operate or license others to operate Carl's Jr. Restaurants in the Development Territory. This conditionality underscores the importance of fulfilling all contractual and financial responsibilities to Carls Jr. and its affiliates.
The FDD also specifies that Carls Jr. reserves the right to operate and license others in various locations such as travel plazas, gas stations, airports and other non-traditional locations. This reservation of rights highlights the importance of maintaining compliance to fully benefit from the development rights granted, as non-compliance could lead to losing exclusivity within the Development Territory.