Is earthquake insurance required for all Carls Jr. locations, and if not, what specific condition triggers the requirement?

According to the 2025 Carls Jr. Franchise Disclosure Document, earthquake insurance is not required for all locations. It is specifically mandated for locations that reside in FEMA Seismic Design Categories "E" or "D".

In addition to earthquake insurance, Carls Jr. franchisees must also maintain commercial property insurance, flood insurance (for locations in FEMA Flood Zones beginning with the letters "A" or "V"), and cyber liability insurance. The commercial property insurance should cover the Franchised Restaurant, business personal property, tenant improvements, and business income for a minimum of 12 months, with covered causes of loss being "Special Form" or "All Risk" with coinsurance conditions not less than 80%.

Carls Jr. also specifies general requirements for all insurance policies, including endorsements to ensure coverages are primary and non-contributory, that policies do not limit coverage in the event of a claim by CJR, and that policies extend to all obligations and liabilities of the franchisee to third parties. The insurance company must have an "A- VIII" or better rating by A.M. Best Company, and deductible amounts generally cannot exceed $100,000 without written approval from CJR. Franchisees must provide evidence of satisfactory insurance and proof of payment to CJR no later than 30 days prior to the scheduled opening date, the date they take possession of the location, or the date construction commences.