What constitutes the commencement of construction for a free-standing Carls Jr. Franchised Restaurant?

According to the 2025 Carls Jr. Franchise Disclosure Document, construction of a free-standing franchised restaurant is considered to have commenced once the franchisee has obtained all required permits and has begun the installation of building footings with the intent to maintain continuous construction thereafter. This definition is important because the franchisee must commence construction within 6 months after the Property Control Date, or site acceptance will be deemed withdrawn. The Property Control Date is the effective date of the lease or sublease, or the closing date of the purchase of the real property.

Carls Jr. requires franchisees to adhere to a strict timeline. Franchisees must complete construction and have the restaurant ready to open no later than 18 months after the Property Control Date, barring delays due to events constituting Force Majeure. Force Majeure events, as defined in Section 28 of the agreement, can proportionately extend the opening date.

Prospective Carls Jr. franchisees should be aware of these construction commencement requirements and timelines, as failure to meet them can result in the loss of site acceptance or termination of the franchise agreement. It is crucial to secure all necessary permits promptly and begin construction in a timely manner to avoid potential penalties and ensure the restaurant opens as scheduled. Franchisees should also familiarize themselves with the definition of Force Majeure in Section 28 to understand what events could justify a delay in construction.