Does Carls Jr. require potential franchisees to execute a Preliminary Agreement?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are not currently a franchisee, prior to your entering into any other agreement with us, we may require you to execute a Preliminary Agreement (the current form of which is attached as Exhibit E) under which you must agree to keep confidential the information provided by CJR to you during Discovery Day (described below). During Discovery Day, you must attend a 2-day meeting at CJR's offices and at a CKR Restaurant during which you will meet with, and be evaluated by, various CJR personnel. In addition, those individuals who will have a 10% or greater interest in the franchisee entity may be required to complete, as we deem necessary and to our satisfaction, an operations overview, which lasts approximately 10 business days ("10-Day Operations Overview").
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 8–20)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. may require potential franchisees to execute a Preliminary Agreement before entering into any other agreement. This agreement ensures that potential franchisees keep confidential the information provided by CJR during Discovery Day.
Discovery Day involves a two-day meeting at CJR's offices and a CKR Restaurant. During this time, potential franchisees meet with and are evaluated by various CJR personnel. This evaluation process is a critical step in determining whether the franchisee is a good fit for the Carls Jr. system.
Additionally, individuals with a 10% or greater interest in the franchisee entity may be required to complete an operations overview lasting approximately 10 business days, if deemed necessary by Carls Jr. This overview provides a more in-depth look at the operational aspects of running a Carls Jr. franchise and allows Carls Jr. to further assess the franchisee's capabilities.