Can the requirement for a Carls Jr. Multi-Unit Development Manager to live within a reasonable driving distance of the Development Territory be waived?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are developing Franchised Restaurants in multiple geographic markets, for all markets in which the Development Principal fails to satisfy our requirements, you must designate and retain an individual to serve as Multi-Unit Development Manager. The Multi-Unit Development Manager will be under the supervision of the Development Principal. The Multi-Unit Development Manager must devote full time and best efforts to supervising the development of the Franchised Restaurants and other restaurants that are to be operated by you that are franchised by us or our affiliates in a geographic market, successfully complete our development training, the FMTP and any additional training required by us, and be approved by us. In addition, the Multi-Unit Development Manager must maintain his/her primary residence within a reasonable driving distance of the Development Territory, unless waived in writing by us.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 59–61)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the requirement for a Multi-Unit Development Manager to live within a reasonable driving distance of the Development Territory can be waived. Specifically, the FDD states that the Multi-Unit Development Manager must maintain their primary residence within a reasonable driving distance of the Development Territory, "unless waived in writing by us." This indicates that Carls Jr. has the discretion to waive this requirement.
For a prospective Carls Jr. franchisee, this waiver option provides some flexibility in managing their development team. If a franchisee is developing restaurants in multiple geographic markets and the Development Principal does not meet Carls Jr.'s requirements, they must designate a Multi-Unit Development Manager. Normally, this manager would need to live close to the development territory. However, if the franchisee has a highly qualified candidate who does not live within a reasonable driving distance, they can request a written waiver from Carls Jr.
It is important to note that the waiver is not guaranteed, as it is at Carls Jr.'s discretion. A prospective franchisee should discuss the specific circumstances with Carls Jr. to understand the likelihood of obtaining a waiver. Factors that might influence Carls Jr.'s decision could include the candidate's experience, the distance between their residence and the development territory, and the franchisee's overall development plan. Franchisees should also consider the potential impact on the manager's ability to effectively supervise the development of the restaurants if they do not live nearby.
This flexibility is not uncommon in the franchise industry, as franchisors often recognize the need to adapt to specific situations. However, franchisees should always carefully review the franchise agreement and discuss any potential waivers with the franchisor before making any decisions.