What is the condition regarding the Bill of Sale that the franchisee must deliver to Carls Jr.?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
CJR may exclude from the Assets purchased in accordance with this Section any equipment, vehicles, furnishings, fixtures, signs, and inventory that are not approved as meeting then-current standards for a Carl's Jr. Restaurant or for which Franchisee cannot deliver a Bill of Sale in a form satisfactory to CJR.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. may exclude certain assets from purchase if the franchisee cannot deliver a Bill of Sale in a form satisfactory to them. Specifically, this condition applies to equipment, vehicles, furnishings, fixtures, signs, and inventory that do not meet the current standards for a Carls Jr. restaurant.
This means that if Carls Jr. exercises its option to purchase the assets of a franchised restaurant, the franchisee must provide a Bill of Sale for all assets that meet the brand's standards. If the Bill of Sale is not in a form that Carls Jr. approves, or if the assets do not meet the then-current standards, Carls Jr. can exclude those items from the purchase.
For a prospective franchisee, this highlights the importance of maintaining up-to-date records and ensuring that all equipment and inventory meet Carls Jr.'s standards. Failure to do so could result in a reduced purchase price if Carls Jr. decides to buy back the assets upon termination or expiration of the franchise agreement. The franchisee should clarify with Carls Jr. what constitutes an acceptable Bill of Sale to avoid potential issues during asset purchase.