What consideration does the Carls Jr. developer provide in exchange for the right to develop franchised restaurants in the Development Territory?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
NOW THEREFORE, in consideration of CJR's grant to Developer of the right to develop Franchised Restaurants in the Development Territory during the term of this Agreement ("Development Term"), as well as the mutual covenants, agreements and obligations set forth below, the parties agree as follows:
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the developer's consideration for the right to develop franchised restaurants in a specific Development Territory involves mutual agreements and obligations. Carls Jr. grants the developer the right to develop franchises within that territory during a defined Development Term. This term lasts until either the last restaurant required by the Development Schedule opens or the date the last restaurant was scheduled to open.
In return, the developer agrees to several covenants, agreements, and obligations. These likely include adhering to Carls Jr.'s standards for quality, operations, and service, as well as developing restaurants in strict accordance with the Development Agreement and the Development Guide. The developer also commits to developing, opening, and continuously operating the number of franchised restaurants specified in the Development Schedule, contingent upon Carls Jr.'s written acceptance of each site.
Furthermore, the developer is expected to devote their best efforts to the development, management, and operation of the franchised restaurants within the Development Territory. They must also maintain the confidentiality of the Carls Jr. System, including trade secrets and proprietary information. This ensures that the developer actively works to establish and maintain Carls Jr. restaurants according to the brand's standards and protects the brand's confidential information.