What is the deadline for effecting a transfer after the death or permanent incapacity of a Carls Jr. franchisee owner?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
G. In the event of the death or permanent incapacity of any person with an ownership interest in Franchisee, CJR shall not unreasonably withhold its consent to a transfer to any person, persons, partnership or corporation designated by his legal representative, provided, however, that:
(1) The requirements of Section 18.B. and of 18.C. shall have been met.
(2) The proposed transfer is applied for in writing within 2 months of the date of death or permanent incapacity by the legal representative of such individual, and is effected within 6 months thereafter.
(3) In the case of permanent incapacity, the legal representative shall have furnished a certification of a physician designated by CJR that Franchisee has been or will be unable to operate the Franchised Restaurant for a period of 6 months or longer.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, in the event of the death or permanent incapacity of a franchisee, their legal representative must apply in writing for a transfer within 2 months of the date of death or permanent incapacity. The transfer itself must be completed within 6 months after the date of death or permanent incapacity. This means the legal representative has a limited time frame to manage the transfer process.
To initiate the transfer, the legal representative must meet the standard transfer requirements, including submitting a franchise application for the proposed transferee and providing all necessary contracts, agreements, and information requested by Carls Jr. The proposed transferee must also meet Carls Jr.'s criteria for franchisees, such as demonstrating experience in high-quality restaurant operations and possessing adequate financial resources.
In the case of permanent incapacity, the legal representative must also provide a certification from a physician designated by Carls Jr., stating that the franchisee has been or will be unable to operate the franchised restaurant for at least 6 months. This requirement ensures that the incapacity is indeed long-term and impacts the operation of the Carls Jr. restaurant. Carls Jr. will not unreasonably withhold consent to the transfer, provided all these conditions are met.