What monetary obligations must be current for a Carls Jr. franchisee to be eligible for renewal?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
or supplier to the Franchised Restaurant; and, for the 12 months before the date of Franchisee's notice and the 12 months before the expiration of the Initial Term, Franchisee shall not have been in default beyond the applicable cure period under this Agreement or any other agreements between Franchisee and CJR or its affiliates.
- (b) Franchisee shall make the capital expenditures required to renovate and modernize the Franchised Restaurant to conform to the interior and exterior designs, decor, color schemes, furnishings and equipment and presentation of the Proprietary Marks consistent with the image of the System for new Carl's Jr. Restaurants at the time Franchisee provides CJR the renewal notice, including such structural changes, remodeling, redecoration and modifications to existing improvements as may be necessary to do so.
- (c) Franchisee and its employees at the Franchised Restaurant shall be in compliance with CJR's then-current training requirements.
- (d) Franchisee shall have the right to remain in possession of the Franchised Location, or other premises acceptable to CJR, for the Renewal Term and all monetary obligations owed to Franchisee's landlord, if any, must be current.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee must meet specific monetary obligations to be eligible for renewal. The franchisee must not be in default under any real estate lease, equipment lease, or financing instrument related to the franchised restaurant. This means all payments to landlords, equipment lessors, and financing entities must be current, with no outstanding debts beyond any applicable cure periods. Additionally, the franchisee must not be in default beyond the applicable cure period with any vendor or supplier to the Franchised Restaurant.
Specifically, for the 12 months before the date of the franchisee's notice of intent to renew and for the 12 months before the expiration of the initial term, the franchisee must not have been in default beyond any applicable cure period under the Franchise Agreement or any other agreements with Carls Jr. or its affiliates. This indicates that a consistent record of timely payments and adherence to financial obligations is crucial for securing a renewal.
In addition to maintaining current monetary obligations, the franchisee must also pay Carls Jr. a renewal fee. This fee is $5,000 for a renewal term of 5 years or $10,000 for a renewal term of 10 years. The franchisee must also execute the renewal franchise agreement and return it to Carls Jr. along with the renewal fee, at least one month before the expiration of the initial term. Meeting these financial and contractual obligations is essential for a Carls Jr. franchisee to successfully renew their franchise agreement.