How long after Carls Jr.'s Purchase Notice does the closing of the purchase need to take place?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
The Purchase Price shall be paid in cash or cash equivalents at the closing of the purchase ("Closing"), which shall take place no later than 60 days after the date of CJR's Purchase Notice.
From the date of CJR's Purchase Notice until Closing:
(1) Franchisee shall operate the Franchised Restaurant and maintain the Assets in the usual and ordinary course of business and maintain in full force all insurance policies required under this Agreement; and
(2) CJR shall have the right to appoint a manager, at CJR's expense, to control the day-to-day operations of the Franchised Restaurant and Franchisee shall cooperate, and instruct its employees to cooperate, with the manager appointed by CJR.
Alternatively, CJR may require Franchisee to close the Franchised Restaurant during such time period without removing any Assets from the Franchised Restaurant.
- G. For a period of 60 days after the date of CJR's Purchase Notice ("Due Diligence Period"), CJR shall have the right to conduct such investigations as it deems necessary and appropriate to determine: (1) the ownership, condition and title of the Assets; (2) liens and encumbrances on the Assets; (3) environmental and hazardous substances at or upon the Franchised Location; and (4) the validity of contracts and liabilities inuring to CJR or affecting the Assets, whether contingent or otherwise.
Franchisee will afford CJR and its representatives access to the Franchised Restaurant and the Franchised Location at all reasonable times for the purpose of conducting inspections of the Assets; provided that such access does not unreasonably interfere with Franchisee's operation of the Franchised Restaurant.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to Carls Jr.'s 2025 Franchise Disclosure Document, the closing of the purchase must occur no later than 60 days after the date of CJR's Purchase Notice. This means that once Carls Jr. provides written notice of its intent to purchase the assets of a franchised location, the franchisee and franchisor have a maximum of 60 days to finalize the transaction.
During this 60-day period, the franchisee is obligated to continue operating the restaurant and maintaining its assets in the ordinary course of business, ensuring all insurance policies remain active. Simultaneously, Carls Jr. has the right to appoint a manager, at their own expense, to oversee the restaurant's daily operations, and the franchisee must cooperate with this manager. Alternatively, Carls Jr. may require the franchisee to temporarily close the restaurant without removing any assets.
Carls Jr. also has a 60-day 'Due Diligence Period' from the date of the Purchase Notice to investigate various aspects of the assets, including ownership, condition, liens, environmental concerns, and contract validity. The franchisee is required to provide Carls Jr. and its representatives access to the restaurant and location for inspections during this period, as long as it doesn't unreasonably interfere with the restaurant's operation. This entire process, from the Purchase Notice to the final closing, is subject to these specific timelines and conditions outlined in the franchise agreement.