What outstanding obligations related to the Franchised Restaurants must be satisfied before Carls Jr. approves a transfer?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) All of Developer's accrued monetary obligations to CJR and its affiliates (whether arising under this Agreement or otherwise) and all other outstanding 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 of CJR, adequately provided for.
CJR reserves the right to require that a reasonable sum of money be placed in escrow to ensure that all of these obligations are satisfied.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, before Carls Jr. approves a transfer of a franchise, the developer must satisfy all accrued monetary obligations to Carls Jr. and its affiliates. These obligations can arise from the agreement itself or any other source.
In addition to monetary obligations, the developer must also fulfill all other outstanding obligations related to the Franchised Restaurants. This includes, but is not limited to, paying bills from suppliers, taxes, and judgments. The developer must also ensure that all required governmental reports, returns, affidavits, or bonds are satisfied.
Carls Jr. retains the right to require a reasonable sum of money to be placed in escrow to ensure that all of these obligations are satisfied before the transfer is approved. This protects Carls Jr. and ensures that the franchise remains in good standing after the transfer.