What constitutes "Covered Equipment" for a Carls Jr. franchise, and what happens when existing equipment does not meet the Franchisor's current specifications?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.2 "Covered Equipment" means Franchisee's approved point-of-sale system, back office computer and printer, as identified on attached Exhibit B, and any additional equipment identified on Exhibit B that has been approved by CKR for use with the Licensed Products and for use at the Franchised Restaurants. Any equipment currently used in the Franchised Restaurants that does not meet the Franchisor's current specifications and product description listed on Exhibit B will not be considered as Covered Equipment. As Covered Equipment reaches its end of life as set forth on Exhibit B, Franchisee will need to replace the equipment with the then current Franchisor approved equipment.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, "Covered Equipment" is defined as the franchisee's approved point-of-sale system, back office computer and printer, as identified on Exhibit B, along with any additional equipment listed on Exhibit B that has been approved by CKR for use with the Licensed Products and at the Franchised Restaurants.
For a prospective Carls Jr. franchisee, this means that the equipment used in their restaurant must meet the franchisor's specifications to be considered "Covered Equipment." If any existing equipment does not meet these current specifications and product descriptions listed on Exhibit B, it will not be considered Covered Equipment. This has implications for support and maintenance, as only Covered Equipment is eligible for support services provided by CKR.
Furthermore, as Covered Equipment reaches its end of life as specified on Exhibit B, the franchisee is responsible for replacing it with the then-current franchisor-approved equipment. This ensures that all Carls Jr. restaurants maintain a consistent standard of technology and operational systems. It is important for franchisees to stay updated with the equipment specifications and replacement schedules outlined in Exhibit B to avoid any disruptions in support services and maintain compliance with the franchise agreement.