What is included in the definition of 'Assets' that Carls Jr. may purchase from the franchisee?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Upon the expiration or termination of this Agreement for any reason, CJR will have the option to purchase from Franchisee some or all of the assets used in the Franchised Restaurant ("Assets"). CJR may exercise its option by giving written notice to Franchisee at any time following expiration or termination up until 60 days after the later of: (1) the effective date of termination or expiration; or (2) the date Franchi
CJR may exclude from the Assets purchased in accordance with this Section any equipment, vehicles, furnishings, fixtures, signs, and inventory that are not approved as meeting then-current standards for a Carl's Jr. Restaurant or for which Franchisee cannot deliver a Bill of Sale in a form satisfactory to CJR.
CJR shall not be required to pay Franchisee any amount for the franchise itself, any rights to the Proprietary Marks or System used in connection with the operation of the Franchised Restaurant nor any goodwill or "going concern" value for the Franchised Restaurant.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, 'Assets' that Carls Jr. has the option to purchase from a franchisee upon expiration or termination of the franchise agreement include assets used in the Franchised Restaurant. These assets may include leasehold improvements, equipment, furnishings, fixtures, signs, and inventory.
However, Carls Jr. may exclude certain items from the purchase. Specifically, they may exclude any equipment, vehicles, furnishings, fixtures, signs, and inventory that do not meet the then-current standards for a Carls Jr. Restaurant. Additionally, Carls Jr. may exclude items for which the franchisee cannot provide a satisfactory Bill of Sale.
It is important to note that the definition of 'Assets' does not include the franchise itself, any rights to the Proprietary Marks or System used in connection with the restaurant, or any goodwill or "going concern" value associated with the restaurant. This means that while Carls Jr. may purchase the physical assets, the franchisee will not be compensated for the value of the business as an ongoing operation or for the brand recognition associated with the Carls Jr. name.