For Carls Jr., what method of payment is required for the royalty fee and advertising fees?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
tronic funds transfer, CJR may designate a day for payment different than the Due Date. On each Due Date, CJR will transfer from the Franchised Restaurant's bank operating account ("Account") the amount reported to CJR in Franchisee's remittance report or determined by CJR by the records contained in the cash registers/computer terminals of the Franchised Restaurant. If Franchisee has not reported Gross Sales to CJR for any fiscal period, CJR will transfer from the Account an amount calculated in accordance with its estimate of the Gross Sales during the fiscal period. If, at any time, CJR determines that Franchisee has underreported the Gross Sales of the Franchised Restaurant, or underpaid the royalty fee or other amounts due to CJR under this Agreement, or any other agreement, CJR shall initiate an immediate transfer from the Account in the appropriate amount in accordance with the foregoing procedure, including interest as provided in this Agreement. Any overpayment will be credited to the Account effective as of the first reporting date after CJR and Franchisee determine that such credit is due.
In connection with payment of the royalty fee, advertising fees, or other amounts payable under this Agreement by electronic funds transfer, Franchisee shall: (1) comply with procedures specified by CJR in the OPM or otherwise in writing; (2) concurrent with the execution of this Agreement, sign and deliver the ACH form attached as Appendix H; (3) perform those acts and sign and deliver any other documents as may be necessary to accomplish payment by electronic funds transfer as described in this Section 8.E.;
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the royalty fee and advertising fees must be paid via electronic funds transfer. The franchisee is required to comply with the procedures specified by Carls Jr., which are outlined in the OPM (Operations and Procedures Manual) or in writing. The franchisee must also sign and deliver the ACH form attached as Appendix H concurrent with the execution of the Franchise Agreement.
To facilitate this payment method, the franchisee must perform all necessary actions and sign any required documents to enable payment via electronic funds transfer. It is the franchisee's responsibility to ensure that sufficient funds are available in the designated account for withdrawal by electronic funds transfer no later than the due date for the payment. Failure to maintain sufficient funds in the account constitutes a default of the Franchise Agreement.
Carls Jr. also stipulates that the franchisee is not entitled to offset, deduct, or withhold any royalty fees, advertising contributions, interest charges, or any other monies payable under the agreement due to alleged non-performance by Carls Jr. or for any other reason. If any payments are not received by the due date, Carls Jr. will charge interest on the outstanding amount from the date it was due until it is paid, at the maximum rate permitted by law in the state where the franchised restaurant is located, not exceeding 1.5% per fiscal period.