What costs is a Carls Jr. franchisee responsible for when proposing a new supplier for approval?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee proposes to purchase any goods or materials (that Franchisee is not required to purchase from CJR, an affiliate of CJR or a designated supplier) from a supplier that CJR has not previously approved, Franchisee shall submit to CJR a written request for such approval, or shall request the supplier to do so itself. CJR has the right to require, as a condition of its approval, that its representatives be permitted to inspect the supplier's facilities, and that such information, specifications and samples as CJR reasonably designates be delivered to CJR and/or to an independent, certified laboratory designated by CJR for testing prior to granting approval. A charge not to exceed the reasonable cost of the inspection and the actual cost of the test shall be paid by Franchisee.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, if a franchisee wants to purchase goods or materials from a supplier not already approved by Carls Jr., the franchisee is responsible for covering certain costs associated with the approval process. Specifically, the franchisee must pay a charge that does not exceed the reasonable cost of inspecting the supplier's facilities. Additionally, the franchisee is responsible for the actual cost of testing the supplier's products. These tests are conducted by either Carls Jr. or an independent, certified laboratory designated by Carls Jr.
This means that a Carls Jr. franchisee cannot simply choose any supplier they want. Carls Jr. retains control over the supply chain to ensure quality and consistency across all franchise locations. If a franchisee finds a potentially better deal with a new supplier, they must factor in the costs of inspection and testing when evaluating the potential savings. This process protects the Carls Jr. brand by ensuring all products meet the required standards before being used in a restaurant.
The franchisee bears the financial risk of these tests. If the supplier ultimately fails to meet Carls Jr.'s standards, the franchisee will not be reimbursed for the inspection and testing fees. Therefore, it is crucial for franchisees to carefully vet potential suppliers before submitting them for approval to minimize the risk of incurring these costs unnecessarily. Franchisees should also inquire about the likely cost of inspection and testing to properly assess the financial implications before proceeding with a new supplier request.