What should a prospective Carls Jr. franchisee do before acquiring any interest in a potential site?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not select the site for your Franchised Restaurant. You select the site for your Franchised Restaurant subject to our acceptance. As noted in Item 1, you should not acquire any interest in a site for your Franchised Restaurant until you have been approved as a franchisee (or, if you already are a franchisee, until you have been approved for expansion) and we have accepted the site in writing. We generally do not own the Franchised Restaurant premises and lease them to franchisees.
For each proposed site for a Franchised Restaurant, you will, if requested by us, submit a Franchise Site Application to us. In addition, you may have to submit a complete real estate package (containing that information as we may reasonably require) for a proposed site, which you reasonably believe conforms to our then-current site selection criteria, including demographic characteristics, traffic patterns, parking, character of the neighborhood, competition from other businesses in the area, the proximity to other businesses (including restaurants operated or franchised by CJR or our affiliates), the nature of other businesses in proximity to the site and other commercial characteristics (including the purchase price, rental obligations and other lease terms for the proposed site) and the size, appearance, other physical characteristics, and a site plan of the premises. Within 30 days after receipt of these documents, and any information which CJR may reasonably require, we will advise you in writing whether we have accepted a particular site; however, CJR has no obligation to review any development proposal if you or your affiliates are not in full compliance with all agreements with CJR or its affiliates. If we do not respond within that time period, we will be deemed not to have accepted the site. Our acceptance or refusal to accept a site for the Franchised Restaurant may be subject to reasonable conditions as determined in our sole discretion.
We may refuse to accept a site for a proposed Franchised Restaurant unless you demonstrate sufficient financial capabilities, in our sole judgment, applying standards consistent with criteria we use to establish Carl's Jr. Restaurants in other comparable market areas, to properly develop, operate and maintain the Franchised Restaurant. Therefore, you also must furnish us with such financial statements and other information regarding you and the development and operation of the proposed Franchised Restaurant, including, without limitation, investment and financing plans for the proposed Franchised Restaurant, as we reasonably may require.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 42–55)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a prospective franchisee should refrain from acquiring any interest in a site for a Franchised Restaurant until they have been approved as a franchisee (or approved for expansion, if they are an existing franchisee) and Carls Jr. has provided written acceptance of the site. The franchisee is responsible for selecting the site, but this selection is subject to Carls Jr.'s approval.
To gain site approval, the prospective Carls Jr. franchisee may need to submit a Franchise Site Application and a comprehensive real estate package. This package should include information that aligns with Carls Jr.'s site selection criteria, such as demographic characteristics, traffic patterns, parking availability, neighborhood character, competition from nearby businesses, proximity to other businesses (including existing Carls Jr. restaurants), the nature of other businesses in the area, commercial characteristics (like purchase price, rental obligations, and lease terms), and the site's physical attributes, including size, appearance, and a detailed site plan.
Carls Jr. will review the submitted documents and information, and within 30 days of receiving all required materials, will inform the franchisee in writing whether the site has been accepted. However, Carls Jr. is not obligated to review the proposal if the franchisee or their affiliates are not in full compliance with all agreements with Carls Jr. or its affiliates. If Carls Jr. does not respond within the 30-day period, the site is considered not accepted. The acceptance of a site may also be subject to certain conditions at Carls Jr.'s discretion.
Carls Jr. may refuse to approve a site if the franchisee cannot demonstrate sufficient financial capabilities to properly develop, operate, and maintain the Franchised Restaurant, based on standards consistent with those used for other Carls Jr. Restaurants in comparable market areas. The franchisee must provide financial statements and other relevant information, including investment and financing plans for the proposed restaurant, as reasonably required by Carls Jr.