What financial and operational requirements must a Carls Jr. franchisee satisfy for new restaurant development to meet the requirements of the 2025 Development Incentive Program?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
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To be eligible for the CJR 2025 Travel Center Development Incentive Program, the following requirements must be satisfied: (i) the Travel Center Location or Gas and Convenience Location must be located within ½ mile of an interstate or limited access highway and must include a combination of high rise pylon sign, billboard or other highway sign (the "Travel Center Program"), (ii) the Travel Center Location or Gas and Convenience Location must be opened pursuant to a Development Agreement dated no later than May 24, 2026, that includes the development of at least three (3) newly-constructed Carl's Jr. Restaurant(s), (iii) franchisee must open the Franchise Restaurants from a Travel Center Location or Gas and Convenience Location by the date(s) outlined in the corresponding Development Agreement, (iv) franchisee may not be in default of its obligations under its existing franchise agreements or related agreements with CJR or its affiliates, (v) franchisee must be approved for growth by CJR and its affiliates, (vi) franchisee must satisfy CJR's then-current financial and operational requirements for new restaurant development, and (vii) franchisee and the Carl's Jr. Restaurant(s) otherwise meet the requirements of the CJR 2025 Travel Center Development Incentive Program.
For Franchisees who develop 3 or more Carl's Jr. restaurants or the conversion of an existing restaurant to a Carl's Jr. restaurant as part of the CJR 2025 Travel Center Development Incentive Program, we will reduce or waive the initial franchisee as set forth in Item 5 and reduce the royalty fee and APO fee as set forth in Item 6.
If you qualify for the CJR 2025 Development Incentive Program, simultaneously with your execution of the qualifying Franchise Agreement, you will sign a CJR 2025 Travel Center Development Incentive Program Addendum to the Franchise Agreement (Exhibit L), which memorializes your right to receive the development incentives described above for the applicable Franchised Restaurant(s). If you sign the CJR 2025 Development Incentive Program Addendum to Franchise Agreement, you will not be entitled, with respect to the applicable Franchised Restaurant(s) covered by the CJR 2025 Travel Center Development Incentive Program, to any other incentives that have been or may be offered by us.
If the requirements for the CJR 2025 Travel Center Development Incentive Program are not satisfied, then the Travel Center Location or Gas and Convenience Location may be eligible for the 2025 Development Incentive Program, provided the following requirements are satisfied: (i) franchisee signs a Franchise Agreement for the development of a newly-constructed Carl's Jr. Restaurant(s) by no later than May 24, 2026 or franchisee signs a Franchise Agreement for the development of a newly constructed Carl's Jr. Restaurant pursuant to the terms of a Development Agreement dated no later than May 24, 2026, (ii) franchisee must open the newly-constructed Carl's Jr. Restaurant(s) by the date(s) outlined in the corresponding Development Agreement or Franchise Agreement, (iii) franchisee may not be in default of its obligations under its existing franchise agreements or related agreements with CJR or its affiliates, (iv)
franchisee must be approved for growth by CJR and its affiliates, (v) franchisee must satisfy CJR's thencurrent financial and operational requirements for new restaurant development, and (vi) franchisee and the Carl's Jr. Restaurant(s) otherwise meet the requirements of the 2025 Development Incentive Program.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 8–20)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, to be eligible for either the CJR 2025 Travel Center Development Incentive Program or the standard 2025 Development Incentive Program, a franchisee must meet certain financial and operational requirements for new restaurant development as determined by Carls Jr. These requirements are in addition to other stipulations, such as signing the Franchise Agreement or Development Agreement by May 24, 2026, and opening the newly-constructed restaurants by the dates outlined in the corresponding agreements. The franchisee must also not be in default of any existing agreements with Carls Jr. or its affiliates and must be approved for growth by Carls Jr. and its affiliates.
For the CJR 2025 Travel Center Development Incentive Program, the Travel Center Location or Gas and Convenience Location must be located within ½ mile of an interstate or limited access highway and must include a combination of high rise pylon sign, billboard or other highway sign. The Development Agreement must include the development of at least three newly-constructed Carls Jr. Restaurants.
Carls Jr. approval for a franchise or expansion, site acceptance, and successful completion of the franchise management training program are all required before a franchisee can develop and open a Franchised Restaurant. The FDD indicates that franchisees should not acquire any interest in a site until they have been approved by Carls Jr. for the franchise or expansion and the site has been accepted.
It is important to note that the specific financial and operational requirements are not detailed in this excerpt of the 2025 FDD. A prospective franchisee should directly inquire with Carls Jr. about the precise financial metrics (e.g., net worth, liquid assets) and operational standards that must be met to qualify for these development incentive programs.