Regarding a Carls Jr. franchise, who is responsible for the expense of removing proprietary signs and trade fixtures upon expiration or termination of the Lease?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Landlord consents to Tenant's use of the proprietary signs, distinctive exterior and interior designs, colors and layouts, and the trademarks prescribed by CJR (collectively, "Proprietary Marks"), and upon expiration or the earlier termination of the Lease, consents to permit Tenant, at Tenant's expense, to remove all such items and other trade fixtures, so long as Tenant makes repairs to the Premises caused by such removal.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the tenant, or franchisee, is responsible for the expense of removing proprietary signs and trade fixtures upon the expiration or termination of their lease. Specifically, the lease addendum states that upon the lease's expiration or termination, the landlord consents to permit the tenant to remove all proprietary marks and other trade fixtures at the tenant's expense. The tenant is also responsible for making repairs to the premises caused by the removal of these items.
This means that when a Carls Jr. franchise lease ends, the franchisee must pay for the removal of all Carls Jr. branding and fixtures from the location. This includes signs, interior designs, colors, layouts, and trademarks. The franchisee is not only responsible for the removal costs but also for repairing any damage caused to the property during the removal process. This could involve patching walls, repairing flooring, or any other necessary repairs to restore the premises to its original condition.
Furthermore, the lease addendum also grants Carls Jr. the right to make alterations and modifications to the premises after the lease or franchise agreement terminates, should the tenant fail to do so promptly. This includes removing proprietary marks and making changes necessary to distinguish the location from a Carls Jr. restaurant. While Carls Jr. has the right to perform these actions, the initial responsibility and cost for removing proprietary marks and fixtures fall on the franchisee. This ensures that the location is no longer identifiable as a Carls Jr. restaurant after the franchise agreement concludes.
Prospective Carls Jr. franchisees should carefully consider these obligations, as the costs associated with removing proprietary signs and fixtures and repairing any resulting damage can be significant. It is advisable to factor these expenses into the overall financial planning for the franchise, including budgeting for the end of the lease term. Understanding these responsibilities upfront can help franchisees avoid unexpected costs and ensure a smooth transition when the lease expires or terminates.