Does the restriction on competitive restaurant businesses apply to Carls Jr. restaurants franchised by CJR or its affiliates?

According to the 2025 Carls Jr. Franchise Disclosure Document, the restriction on competitive restaurant businesses does not apply to other restaurants operated by the developer (franchisee) that are already franchised by CJR or its affiliates. This means a franchisee can operate multiple Carls Jr. locations without those locations being considered a competitive conflict.

However, this exception only applies to restaurants already franchised by Carls Jr. or its affiliates. The franchisee is still restricted from owning, operating, or having an interest in other restaurant businesses that compete with the Carls Jr. system, especially those with a significant portion of sales from "Designated Entrée Items" or those operating in a quick-service format. Designated Entrée Items include hamburger sandwiches, chicken sandwiches, breakfast sandwiches, and any other entrée item designated by CJR as part of the Carls Jr. system.

This restriction applies during the Development Term and for two years following its expiration, transfer, or termination. During the Development Term, there are no geographical limitations, but after the agreement ends, the restriction applies within the Development Territory, within 2 miles of its border, and within a 2-mile radius of any existing Carls Jr. restaurant. This non-compete agreement ensures that franchisees remain focused on the Carls Jr. brand and do not divert business to competing ventures, protecting the Carls Jr. system's trade secrets and market position.