What is the nonrefundable transfer fee payable to Carls Jr. for reviewing a transfer application?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
g obligations related to the Franchised Restaurants (including, but not limited to, bills from suppliers, taxes, judgments and any required governmental reports, returns, affidavits or bonds) have been satisfied or, in the reasonable judgment
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, if a developer seeks to transfer their agreement and Carls Jr. consents to the transfer, the transferor must pay a nonrefundable transfer fee of $2,500. This fee is specifically for Carls Jr.'s review of the transfer application. This fee must be paid before the transfer becomes effective.
This fee covers the costs that Carls Jr. incurs while reviewing the application. It is nonrefundable, meaning that the transferor will not get the money back, regardless of whether the transfer is ultimately approved or denied. This is a fairly standard practice in franchising, as franchisors need to cover their administrative and legal expenses associated with the transfer process.
It's important to note that this fee is just one part of the transfer process. The developer and the proposed transferee will also need to execute an assignment agreement and any necessary amendments to the agreement. The transferor remains liable for all obligations to Carls Jr. incurred before the date of the transfer and must execute any instruments to evidence that liability. A prospective franchisee should carefully consider all these costs and obligations before deciding to transfer their franchise agreement.