What conditions must a transferee meet to be approved by Carls Jr. for a franchise transfer?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section In Franchise Agreement | Summary | |
|---|---|---|---|
| l. | Our approval of transfer by you | Sections 18.B & 8.G. | Unless otherwise expressly permitted, you must obtain our prior written consent for any Transfer (as defined in the Franchise Agreement). |
| m. Conditions for our approval of transfer | Sections 18.BC. | Conditions include: transferee qualified; reasonable sales price; payment of amounts due; no default under any agreement with CJR or its affiliates; no default beyond the applicable cure period under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or agreement with any vendor or supplier to the Franchised Restaurant; signed release; transferee must complete training; compliance with all obligations to us or our affiliates under transferee's and each of transferee's affiliates development and franchise agreements with us or our affiliates; remodeling, maintenance and facility upgrades to modernize Franchised Restaurant to current image; transfer fee paid; and agreements signed. | |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 61–66)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee needs prior written consent from Carls Jr. for any transfer of their franchise. To get this approval, the prospective transferee must meet several conditions.
These conditions include demonstrating that the transferee is qualified to operate the franchise. The sales price for the transfer must be deemed reasonable by Carls Jr. All outstanding payments owed to Carls Jr. and its affiliates must be settled. The franchisee must not be in default of any agreements with Carls Jr. or its affiliates. Additionally, there should be no outstanding defaults beyond any applicable cure periods related to real estate or equipment leases, financing instruments, or agreements with vendors or suppliers associated with the Franchised Restaurant.
Furthermore, the transferee must sign a release, complete the required training program, and comply with all obligations to Carls Jr. and its affiliates under any development and franchise agreements. The Franchised Restaurant must be remodeled and upgraded to meet the current image standards of Carls Jr. A transfer fee must be paid to Carls Jr., and all necessary agreements must be signed to finalize the transfer.
Carls Jr. also retains the right of first refusal, allowing them or their designee to match any offer made for the franchisee's business. These stipulations ensure that any new franchisee meets Carls Jr.'s standards and that the transfer process is conducted smoothly and in accordance with the franchise agreement.