How is the Renewal Fee for a Carls Jr. franchise determined?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
6. Section 8.A. is deleted and is replaced by the following:
A. Renewal Fee
The Renewal Fee is set forth in Appendix 1 attached to the Renewal Addendum and is in the amount provided for in the Prior Agreement. Franchisee shall pay the Renewal Fee to CJR simultaneously with the execution of this Agreement. The Renewal Fee is paid in consideration of CJR renewing the Franchise for the Franchised Restaurant for the Renewal Term. The Renewal Fee was fully earned at the time paid and is not refundable for any reason whatsoever. All references to the "Initial Franchise Fee" shall mean and refer to the Renewal Fee.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the renewal fee is determined by the Prior Agreement. The Renewal Fee is set forth in Appendix 1 attached to the Renewal Addendum and is in the amount provided for in the Prior Agreement. The franchisee must pay the renewal fee to Carls Jr. simultaneously with the execution of the agreement.
The renewal fee is paid in consideration of Carls Jr. renewing the franchise for the Franchised Restaurant for the Renewal Term. Once paid, the renewal fee is fully earned and is not refundable for any reason. All references to the "Initial Franchise Fee" shall mean and refer to the Renewal Fee.
In simpler terms, when a Carls Jr. franchisee seeks to renew their franchise agreement, the renewal fee they will pay is the amount stipulated in their previous franchise agreement. This fee compensates Carls Jr. for granting the franchisee the right to continue operating the restaurant under the Carls Jr. brand for the renewal term. The fee must be paid when the renewal agreement is signed, and it is non-refundable, regardless of any circumstances that may arise during the renewal term.