What conditions must a Carls Jr. franchisee satisfy prior to the Construction Commencement Date?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Prior to the Construction Commencement Date, Franchisee shall have: (1) eliminated or otherwise satisfied all of the conditions set forth in this Agreement; (2) paid CJR the balance, if any, of the Initial Franchise Fees required by this Agreement; (3) if not previously signed, executed this Agreement; and (4) if not previously provided, provided CJR a copy of the fully-executed lease for the Franchised Location (containing those provisions specified by CJR in accordance with Section 3) or, if Franchisee owns the Franchised Location, proof of Franchisee's ownership interest. As used in this Agreement, construction shall have commenced only after Franchisee has obtained all required permits and: (a) with respect to a free-standing Franchised Restaurant, Franchisee has begun the installation of building footings with the intent to maintain continuous construction thereafter; or (b) with respect to a non free-standing Restaurant or a Restaurant being converted from a prior use, Franchisee has begun the installation of sub-floor plumbing with the intent to maintain continuous construction thereafter.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee must meet specific conditions before starting construction. The franchisee must resolve all conditions outlined in the franchise agreement. They must also pay any outstanding balance of the initial franchise fees. If the agreement hasn't been signed yet, the franchisee needs to execute it. Finally, Carls Jr. requires a copy of the fully-executed lease for the franchise location, including specific provisions detailed in Section 3 of the agreement, or proof of ownership if the franchisee owns the location.
Construction must begin within six months of the Property Control Date, which is the effective date of the lease or the closing date if the franchisee purchases the property. Failure to start construction within this timeframe may result in the withdrawal of site acceptance without notice. Construction is officially considered to have commenced once all necessary permits are secured and the franchisee has started installing building footings for free-standing restaurants or sub-floor plumbing for non-free-standing or converted restaurants, with the intention of continuous construction thereafter.
These requirements ensure that the franchisee is fully committed and prepared before starting the construction phase, which can be a significant investment. By ensuring all fees are paid, agreements are signed, and location details are finalized, Carls Jr. aims to minimize potential delays or complications during the construction process. The six-month window to begin construction from the Property Control Date encourages franchisees to move forward promptly once they secure their location.