What is the first action a Carls Jr. Developer must take when proposing a Transfer?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Developer shall advise CJR in writing of any proposed Transfer, submit (or cause the proposed transferee to submit) a franchise application for the proposed transferee, submit a copy of all contracts and all other agreements or proposals and submit all other information requested by CJR relating to the proposed Transfer.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a Developer who wants to transfer their development agreement must first advise CJR (Carls Jr.) in writing of the proposed transfer. This initial notification is a critical first step, as any transfer without the prior written consent of CJR is considered a material breach of the agreement, potentially leading to termination without an opportunity to correct the breach.
Following the written notification, the Developer must also ensure that the proposed transferee submits a franchise application. Additionally, the Developer is required to provide CJR with copies of all contracts, agreements, or proposals related to the transfer. The Developer must also submit any other information CJR requests to evaluate the proposed transfer.
Carls Jr. retains significant discretion over transfer approvals. Even if Carls Jr. does not exercise its right of first refusal, the decision to consent to the transfer is based on numerous factors deemed relevant by Carls Jr. These factors include the transferee's experience in high-quality restaurant operations, their managerial and operational standards, financial resources, and compatibility with Carls Jr.'s management culture. The sales price must also be reasonable, ensuring the transferee's ability to successfully operate and develop the franchised restaurants.