Does Carls Jr. reserve the right to merchandise and distribute goods and services identified by the Proprietary Marks through any method or channel of distribution?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
You may only sell or distribute products identified by some or all of the Proprietary Marks from the Franchised Location; you may not use any other method or channel of distribution. We do not impose any geographic restrictions on your ability to solicit customers; however, see Item 13 for Internet restrictions. In addition, you must participate in all online ordering and delivery programs that we may designate from time to time and comply with the terms and conditions of such programs, including any geographic or other delivery restrictions. There are no restrictions on our ability to solicit customers, nor must we pay any compensation to you for soliciting or accepting orders. We reserve all rights to use and license the Carl's Jr. System other than those we expressly grant to you. We reserve the right to merchandise and distribute goods and services identified by the Proprietary Marks (or different proprietary marks) through any method or channel of distribution, including the Internet.
Source: Item 12 — TERRITORY (FDD pages 55–56)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. retains significant rights regarding the distribution of goods and services associated with its brand. Specifically, Carls Jr. reserves the right to merchandise and distribute goods and services identified by its Proprietary Marks through any method or channel of distribution, including the Internet. This means that while franchisees are permitted to sell and distribute products identified by the Proprietary Marks from their Franchised Location, they are restricted from using any other distribution methods unless explicitly approved.
This reservation of rights has several implications for prospective Carls Jr. franchisees. First, Carls Jr. is not obligated to compensate franchisees for orders they solicit or accept. Second, franchisees must participate in any online ordering and delivery programs that Carls Jr. designates and comply with the terms and conditions of those programs. This includes any geographic or other delivery restrictions.
Furthermore, prospective franchisees should be aware that they will not receive an exclusive territory under either the Development Agreement or the Franchise Agreement. They may face competition from other franchisees, outlets owned by Carls Jr., or other channels of distribution or competitive brands that Carls Jr. controls. This lack of territorial exclusivity is a common practice in franchising, but it is important for franchisees to understand that they will need to compete for customers within their market area. Franchisees should carefully consider the potential impact of this competition on their business before investing in a Carls Jr. franchise.