What are the requirements for a Carls Jr. franchisee to renew their franchise agreement at the end of the initial term?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Franchise | Summary | |
|---|---|---|---|
| Agreement | |||
| c. | Requirements for you to renew or extend d. Termination by you | Section 2.B. Not Applicable | In order to renew at the end of the Initial Term you must: give timely notice; sign general release; comply with training requirements; be in good standing; not be in default under any agreement with us and our affiliates; not be in default beyond the cure period under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or any agreement with any vendor or supplier to the Franchised Restaurant; have the right to remain in possession of the Franchised Location for the Renewal Term; remodel in accordance with our then-current standards; and pay a renewal fee. You must also sign our then-current form of Franchise Agreement, the terms of which likely will differ from your original Franchise Agreement, including, without limitation, those relating to royalty fees and advertising obligations. |
| e. | Termination by us without cause | Not Applicable | |
| f. | Termination by us with cause | Section 21 | We may terminate upon default, which includes, but is not limited to, remaining in default beyond any applicable cure period under any agreement with us or our affiliates, including any Development Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 61–66)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee can renew their franchise agreement for a Renewal Term of 10 years or, at their option, 5 years. To renew the franchise agreement at the end of the initial term, a franchisee must provide timely notice, sign a general release, and comply with current training requirements.
Additionally, the franchisee must be in good standing with Carls Jr. and must not be in default under any agreement with Carls Jr. or its affiliates. The franchisee must also not be in default beyond the cure period under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or any agreement with any vendor or supplier to the Franchised Restaurant. The franchisee must have the right to remain in possession of the Franchised Location for the Renewal Term.
Furthermore, the franchisee will likely be required to remodel the restaurant in accordance with Carls Jr.'s then-current standards and pay a renewal fee. The franchisee must also sign the then-current form of Franchise Agreement, which may have terms that differ from the original agreement, potentially including changes to royalty fees and advertising obligations. It is important to note that failure to meet any of these conditions could result in the franchisee not being able to renew their franchise agreement.