Does the Carls Jr. Franchise Agreement require that its execution not conflict with any other agreements the franchisee or any person with ownership interest in the franchisee is a party to?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that it will at all times faithfully, honestly and diligently perform its obligations under this Agreement, that it will continuously exert its best efforts to promote and enhance the business of the Franchised Restaurant and that it will not engage in any other business or activity that may conflict with its obligations under this Agreement, except the operation of other Carl's Jr. Restaurants or other restaurants operated by Franchisee that are franchised by CJR or its affiliates or other restaurants as disclosed to CJR by Franchisee in Appendix A.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee must faithfully, honestly, and diligently perform their obligations under the Franchise Agreement. The franchisee must continuously exert its best efforts to promote and enhance the business of the franchised restaurant.
Carls Jr. requires that franchisees not engage in any other business or activity that may conflict with their obligations under the Franchise Agreement. An exception exists for the operation of other Carls Jr. restaurants or other restaurants franchised by CJR or its affiliates, or other restaurants disclosed to CJR by the franchisee in Appendix A.
This requirement ensures that the franchisee's primary focus is on operating and improving the Carls Jr. restaurant, preventing divided attention or conflicting interests that could negatively impact the brand and the restaurant's performance. Prospective franchisees should carefully review Appendix A and disclose any existing business interests to Carls Jr. to ensure compliance with this requirement.