What happens to the Development Fee, including any remaining balance, after the termination of the Carls Jr. Development Agreement?

According to the 2025 Carls Jr. Franchise Disclosure Document, upon termination of the Development Agreement, Carls Jr. retains the Development Fee. This includes any remaining unused balance that the developer has on account with Carls Jr. In practical terms, this means that if a developer's agreement is terminated for any reason, they will not receive a refund of any portion of the development fee, regardless of whether all of the funds have been used.

This policy could have significant financial implications for prospective Carls Jr. developers. The development fee is a substantial investment, and the risk of losing the entire fee upon termination should be carefully considered. It is important for developers to understand the conditions under which the agreement can be terminated and to assess their ability to meet the development schedule and other obligations outlined in the agreement.

Franchisors often have different policies regarding development fees. Some may offer a partial refund if the agreement is terminated early, while others may allow the fee to be applied to future development opportunities. It is essential for prospective franchisees to carefully review the terms of the development agreement and to seek legal advice to fully understand their rights and obligations. Understanding this policy is crucial for anyone considering a development agreement with Carls Jr.