What is the Carls Jr. Renewal Fee for a renewal term of 10 years?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
dates | Actual cost of updates | As incurred | The Franchise Agreement gives us the right to require you, at your expense, to use any software or other technology that we may designate or develop in the future. |
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Costs and Attorneys' Fees | CJR's costs and expenses | As incurred | If we prevail in litigation regarding enforcement of the terms of any agreement with you, you must pay our attorneys' fees and costs. |
| Carl's Jr. Renewal Fee | $5,000 for a renewal term of 5 years; $10,000 for a renewal term of 10 years | At the time the new franchise agreement is signed | We reserve the right to prorate the Renewal Fee to align with a renewal term with a corresponding lease expiration date. |
| Liquidated Damages | As calculated (see Remarks) | As incurred | If the Franchise Agreement is terminated following your default, since it would be difficult, if not impossible, to determine the amount of damages that we will suffer as a result of your breach, unless waived by us in our sole discretion, you must immediately pay us, as damages and not as a penalty, the amount of the royalty fee that you would have paid during the period ("Damages Period") from the effective date of termination to the earlier of: (a) the 3-year anniversary of the effective date of termination; or (b) the date on which the initial term of the Franchise Agreement was scheduled to expire. The amount of such royalty fee during the Damages Period will be calculated by multiplying the average weekly royalty fee that you owed for the 52-week period prior to the effective |
Source: Item 6 — Other Fees (FDD pages 28–35)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the renewal fee for a franchise agreement with a 10-year renewal term is $10,000. This fee is due when the new franchise agreement is signed.
Carls Jr. retains the right to prorate the renewal fee. This means that the fee could be adjusted to align with a renewal term that matches the expiration date of the corresponding lease. This condition provides Carls Jr. with flexibility in managing franchise terms and lease agreements.
Renewal fees are common in the franchise industry and typically cover the franchisor's costs associated with processing the renewal, updating agreements, and providing continued support to the franchisee. The fee amount can vary widely depending on the brand, the length of the renewal term, and the specific services included in the renewal process. A prospective Carls Jr. franchisee should consider this fee as part of their long-term investment and factor it into their financial projections.
It is important for potential franchisees to understand the terms and conditions related to renewal fees, including when the fee is due and whether it is refundable under certain circumstances. Franchisees should also inquire about any additional costs or requirements associated with the renewal process to ensure they are fully prepared for the renewal of their Carls Jr. franchise agreement.