Does Carls Jr. place any restrictions on where I can advertise or solicit customers for my Franchised Restaurants, besides Internet restrictions outlined in Item 13?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
There are no restrictions on the areas in which you may advertise or solicit customers for your Franchised Restaurants; however, see Item 13 for Internet restrictions. We reserve all rights to use and license the Carl's Jr. System other than those we expressly grant you under the Development Agreement, the Franchise Agreement. There are no restrictions on the areas in which we may advertise or solicit customers, nor must we pay any compensation to you for soliciting or accepting orders from inside the Development Territory. The rights we reserve include the right to use any other channel of distribution, including the Internet, to make sales in the Development Territory using the Proprietary Marks or different proprietary marks.
Source: Item 12 — TERRITORY (FDD pages 55–56)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, franchisees generally face no geographic restrictions on advertising or soliciting customers for their Franchised Restaurants, with the exception of Internet restrictions detailed in Item 13. This policy applies both under the Development Agreement and the Franchise Agreement. However, Carls Jr. reserves the right to advertise and solicit customers without compensating the franchisee, even within the franchisee's development territory.
This lack of geographic advertising restrictions means that Carls Jr. franchisees have the freedom to market their restaurants in a broad area, potentially reaching a larger customer base. However, it also means that franchisees may face competition from other Carls Jr. restaurants or from the franchisor's own marketing efforts in the same areas. Franchisees must participate in online ordering and delivery programs that Carls Jr. may designate and comply with the terms and conditions of such programs, including any geographic or other delivery restrictions.
Carls Jr. also notes that its affiliates, including those managed by Roark Capital Management, LLC, may operate businesses that sell similar goods or services. These affiliated businesses can solicit and accept orders from customers near a franchisee's location. While Carls Jr. states that it does not anticipate conflicts between franchisees and these affiliated businesses, it also clarifies that it has no obligation to resolve any conflicts that may arise. This could present a risk to franchisees if affiliated businesses actively compete for the same customers.