Is Carls Jr. liable to the Developer for the site selection assistance it provides?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
CJR will provide Developer with the following site selection assistance: (1) CJR's site selection guidelines, and, as Developer may request, a reasonable amount of consultation with respect thereto; and (2) such site evaluation as CJR may deem advisable as part of its evaluation of Developer's request for site acceptance. Developer agrees that CJR will incur no liability to Developer for site selection assistance provided by CJR. Developer is solely responsible for conducting all such due diligence, investigation and validation with its own third party advisors with respect to a proposed site. CJR's consent to a proposed site is simply for purposes of confirming that the site meets CJR's then-current site selection criteria.
CJR's acceptance of one or more sites is not a representation or a promise by CJR that a Franchised Restaurant at an Authorized Site will achieve a certain sales volume or a certain level of profitability. Similarly, CJR's acceptance of one or more sites and its refusal to accept other sites is not a representation or a promise that an Authorized Site will have a higher sales volume or be more profitable than a site which CJR did not accept. Acceptance by CJR merely means that the minimum criteria which CJR has established for identifying suitable sites for proposed Carl's Jr. Restaurants have been met. Because real estate development is an art and not a precise science, Developer agrees that acceptance, or refusal to accept a proposed site by CJR, whether or not a site report is completed and/or submitted to CJR shall not impose any liability or obligation on CJR.
CJR assumes no liability or responsibility for: (1) evaluation of an Authorized Site's soil for hazardous substances; (2) inspection of any structure on the Authorized Site for asbestos or other toxic or hazardous materials; (3) compliance with the Americans with Disabilities Act ("ADA"); or (4) compliance with any other applicable law. It is Developer's sole responsibility to obtain satisfactory evidence and/or
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to Carls Jr.'s 2025 Franchise Disclosure Document, Carls Jr. will provide developers with site selection assistance, including site selection guidelines and consultation, as well as site evaluation. However, Carls Jr. explicitly states that it will incur no liability to the developer for the site selection assistance it provides. The developer is solely responsible for conducting all due diligence, investigation, and validation with their own third-party advisors regarding a proposed site. Carls Jr.'s consent to a proposed site is simply to confirm that the site meets their then-current site selection criteria.
Carls Jr.'s acceptance of a site does not represent or promise that a franchised restaurant at that site will achieve a certain sales volume or level of profitability, nor does it imply that an accepted site will perform better than a rejected one. Acceptance by Carls Jr. only indicates that the minimum criteria for suitable sites have been met. The document emphasizes that real estate development is not a precise science, and therefore, Carls Jr. bears no liability whether or not a site report is completed or submitted.
Furthermore, Carls Jr. assumes no liability or responsibility for evaluating the site's soil for hazardous substances, inspecting structures for hazardous materials, ensuring compliance with the Americans with Disabilities Act (ADA), or ensuring compliance with any other applicable law. The developer is solely responsible for obtaining satisfactory evidence and/or inspections regarding these matters. The decision to accept or reject a particular site ultimately belongs to the developer, subject to Carls Jr.'s acceptance. Preliminary acceptance by any Carls Jr. representative is not conclusive or binding, as their recommendation may be rejected by Carls Jr.