How often can Carls Jr. request a franchisee to modernize their restaurant?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Extensive structural changes, major remodeling and renovations, and substantial modifications to existing equipment and improvements to modernize and conform the Franchised Restaurant to the image of the System for new franchised and company restaurants shall be required: (i) as a condition of renewal, (ii) as a condition of CJR issuing its consent to a proposed transfer as defined further in Section 18 below, or (iii) at CJR's request (but not more often than every 5 years).
Capital expenses necessary for the repair and maintenance of the Franchised Location and modifications required by applicable law or required to abate a hazardous situation are not subject to the time limitations described in the preceding sentence.
Within 60 days after receipt of CJR's written notice regarding the required modernization, Franchisee shall prepare and complete drawings and plans, along with a project timeline, for the required modernization.
These drawings and plans must be submitted to, and their use approved by, CJR prior to the commencement of work.
Franchisee shall complete the required modernization within the time reasonably specified by CJR in its written notice.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. can request franchisees to undertake extensive structural changes, major remodeling and renovations, and substantial modifications to existing equipment and improvements to modernize and conform the Franchised Restaurant to the image of the System for new franchised and company restaurants. This can occur (i) as a condition of renewal, (ii) as a condition of CJR issuing its consent to a proposed transfer, or (iii) at CJR's request, but not more often than every 5 years.
This means that, outside of the conditions of renewal or transfer, Carls Jr. can mandate a full modernization of a franchise location no more than once every five years. These modernizations are designed to keep the restaurant aligned with the current brand image. The franchisee is responsible for the costs associated with these changes.
The FDD specifies that capital expenses for repairs and maintenance, modifications required by law, or actions needed to abate a hazardous situation are not subject to the five-year limitation. This indicates that Carls Jr. can require franchisees to make necessary repairs or safety-related changes at any time, regardless of when the last modernization occurred. Franchisees have 60 days after receiving written notice to prepare and submit drawings, plans, and a project timeline for the required modernization, which must be approved by Carls Jr. before work begins. The franchisee must complete the modernization within the timeframe specified by Carls Jr.
Prospective franchisees should be aware of the potential costs associated with these required modernizations and factor them into their financial planning. It is important to maintain open communication with Carls Jr. to understand the scope and timeline of any required changes and to ensure compliance with the franchise agreement.