What fee might Carls Jr. charge for reviewing a supplier or distributor?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
ate, we must consent to your selection of the site for your Carl's Jr. Restaurant. If you lease the Restaurant premises from a third party landlord, you must sign the Franchise Lease Addendum attached as Appendix G to the Franchise Agreement.
Approval of a supplier or a distributor may be conditioned on requirements relating to the frequency of delivery, reporting capabilities, standards of service, including prompt attention to complaints, sanitation standards, facility standards, insurance and other quality assurance requirements or other criteria, and concentration of purchases, as set forth above, and such approval may be temporary pending a further evaluation of the supplier by us. A fee not to exceed our actual costs of reviewing the supplier or distributor and auditing the facility, if needed, may be charged by us and must be paid by you. We may establish commissaries and distribution facilities owned and operated by us or an affiliate that we will designate as an approved supplier.
One or more of our officers may own nominal interests in certain of our approved suppliers which are publicly traded companies or through investment funds.
We and our affiliates may receive fees, payments, commissions, field-of-use license royalties or other consideration from approved suppliers based on sales to franchisees, from promotional allowances and volume discounts. We and our affiliates may use all amounts received from approved suppliers, distributors or third parties, whether or not based on your and/or other franchisees' actual or prospective dealings with them, without restriction for any purposes we or our affiliates deem appropriate. Finally, we and our affiliates provide supply chain, quality assurance, distribution and logistics services for the franchise system. These services include negotiating with suppliers and distributors who will sell and distribute goods to our franchisees, designating one or more distributors to service our franchisees, and managing distribution logistics. As a result, we and our affiliates reserve the right to recover our costs related to performing these services by collecting a per-case distribution fee for all cases sold by an approved supplier to our franchisees and from other logistics-related programs.
We may charge non-approved suppliers reasonable testing and/or inspection fees.
If you propose to purchase any goods or materials (that you are not required to purchase from CJR, an affiliate of CJR or a designated supplier) from a supplier that we have not previously approved, you must submit to us a written request for such approval, or you must request that the supplier do so.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 37–41)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, if a franchisee proposes to purchase goods or materials from a supplier not already approved by Carls Jr., the franchisee must request approval from Carls Jr. or have the supplier do so. As a condition of approval, Carls Jr. may require an inspection of the supplier's facilities and submission of information, specifications, and samples for testing.
Carls Jr. may charge a fee to cover the costs of reviewing a supplier or distributor. This fee will not exceed the actual costs incurred by Carls Jr. for reviewing the supplier or distributor and auditing the facility, if needed. Additionally, if a facility audit is required, the franchisee must submit a $1,500 deposit to Carls Jr. against the cost of inspecting the supplier's facility. The franchisee will be responsible for any additional costs and expenses associated with the inspection, which must occur before final approval.
Carls Jr. will notify the franchisee within 60 days whether the supplier is approved. Carls Jr. may also periodically require repeat testing and/or facility audits at the franchisee's expense to ensure continued compliance with Carls Jr.'s specifications and facility standards. Carls Jr. will provide written notice if any approvals are revoked.