Does Carls Jr. consider the franchisee's experience when entering into the Franchise Agreement?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Franchisee shall advise CJR in writing of any proposed Transfer, submit (or cause the proposed transferee to submit) a franchise application for the proposed transferee, submit a copy of all contracts and all other agreements or proposals and submit all other information requested by CJR relating to the proposed Transfer.
If CJR does not exercise its right of first refusal pursuant to Section 18.J., the decision as to whether or not to consent to a proposed Transfer shall be made by CJR in its sole discretion and shall include numerous factors deemed relevant by CJR.
These factors may include, but will not be limited to, the following:
- (1) The proposed transferee (and if the proposed transferee is not a natural person, all persons that have any direct or indirect interest in the transferee as CJR may require) must demonstrate to CJR's satisfaction extensive experience in high quality restaurant operations of a character and complexity similar to Carl's Jr.
Restaurants; must meet the managerial, operational, experience, quality, character and business standards for a franchisee promulgated by CJR from time to time; must possess a good character, business reputation and credit rating; must have an organization whose management culture is compatible with CJR's management culture; and must have adequate financial resources and working capital, as determined by CJR in its sole discretion, to meet Franchisee's obligations under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, when a franchisee seeks to transfer their franchise to another party, Carls Jr. does consider the proposed transferee's experience. Specifically, the proposed transferee must demonstrate extensive experience in high-quality restaurant operations of a character and complexity similar to Carls Jr. Restaurants.
Carls Jr. also requires that the proposed transferee meet the managerial, operational, experience, quality, character, and business standards for a franchisee, as determined by Carls Jr. from time to time. Additionally, the proposed transferee must possess a good character, business reputation, and credit rating, and have an organization whose management culture is compatible with Carls Jr.'s management culture.
Finally, the proposed transferee must have adequate financial resources and working capital, as determined by Carls Jr. in its sole discretion, to meet the franchisee's obligations under the Franchise Agreement. These criteria ensure that any new franchisee taking over an existing Carls Jr. location has the necessary skills, experience, and resources to maintain the brand's standards and operational efficiency.