What information relating to the proposed Transfer can Carls Jr. request from the Developer?
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.
If CJR does not exercise its right of first refusal pursuant to Section 10.J., the decision as to whether or not to consent to a proposed Transfer shall be made by CJR in its sole discretion and shall include numerous factors deemed relevant by CJR.
These factors may include, but will not be limited to, the following:
(1) The proposed transferee (and if the proposed transferee is not a natural person, all persons that have any direct or indirect interest in the transferee as CJR may require) must demonstrate to CJR's satisfaction that it has extensive experience in high quality restaurant operations of a character and complexity similar to the restaurants franchised by CJR or its affiliates; must meet the managerial, operational, experience, quality, character and business standards for a developer promulgated by CJR from time to time; must possess a good character, business reputation and credit rating; must have an organization whose management culture is compatible with CJR's management culture; and must have adequate financial resources and working capital, as determined by CJR in its sole discretion, to meet Developer's development obligations under this Agreement.
(2) The sales price shall not be so high, in CJR's reasonable judgment, as to jeopardize the ability of the transferee to develop, maintain, operate and promote the Franchised Restaurants and meet financial obligations to CJR, third party suppliers and creditors.
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 wishes to transfer their development agreement must provide Carls Jr. with specific information related to the proposed transfer. The Developer must advise Carls Jr. in writing of any proposed transfer and submit a franchise application for the proposed transferee. Additionally, the developer must submit a copy of all contracts and other agreements or proposals related to the transfer.
Carls Jr. can request any other information it deems necessary relating to the proposed transfer. This broad clause allows Carls Jr. to thoroughly vet potential transferees to ensure they meet the brand's standards and are capable of fulfilling the development agreement.
Carls Jr. also outlines specific factors it may consider when deciding whether to consent to a transfer. These factors include the proposed transferee's experience in high-quality restaurant operations, their managerial and operational standards, their character, business reputation, and credit rating, and whether their management culture aligns with Carls Jr.'s. Furthermore, Carls Jr. will assess whether the transferee has adequate financial resources and working capital to meet the development obligations. Carls Jr. will also consider if the sales price is too high, which could jeopardize the transferee's ability to successfully operate and develop the franchised restaurants and meet their financial obligations.