What requirement must the governing documents of a Carls Jr. Developer contain regarding Transfers, as defined in Section 10.A?

According to the 2025 Carls Jr. Franchise Disclosure Document, if a Developer wishes to transfer their agreement to a corporation or limited liability company for convenience of ownership, the requirements of Section 10.B apply. However, the Developer will not be required to pay a transfer fee in this specific scenario.

Section 10.A broadly defines a "Transfer" as any sale, assignment, transfer, conveyance, gift, pledge, mortgage, or encumbrance of any direct or indirect interest in the Developer, the Development Agreement, or any assets related to the Developer's operations. This definition is quite comprehensive, covering a wide range of transactions that could affect the ownership or control of the Carls Jr. development rights.

This policy ensures that Carls Jr. maintains control over who operates and develops their franchises, even in cases where the ownership structure changes for convenience. By requiring adherence to Section 10.B, Carls Jr. can vet the new corporate or LLC entity and ensure they meet the brand's standards, while waiving the transfer fee in these specific cases may encourage franchisees to streamline their business structure without incurring additional costs.