Does Carls Jr. have a right of first refusal to acquire a franchisee's business?

According to the 2025 Carls Jr. Franchise Disclosure Document, Carls Jr. does have a right of first refusal to acquire a franchisee's business. Specifically, Carls Jr. or its designee can match any offer a franchisee receives for their business. This provision is detailed in Section 18.J of the Franchise Agreement.

This right of first refusal means that if a Carls Jr. franchisee decides to sell their business and receives an offer from a potential buyer, they must first present that offer to Carls Jr. Carls Jr. then has the option to purchase the business on the same terms as the offer. This allows Carls Jr. to maintain control over who becomes a franchisee within their system and potentially consolidate ownership.

Carls Jr. also has the option to purchase some or all of a franchisee's assets upon the expiration or earlier termination of the Franchise Agreement. The purchase price will be either agreed upon by both parties or determined by appraisers. This is outlined in Section 23 of the Franchise Agreement. These conditions regarding transfer and acquisition are important for prospective franchisees to consider, as they impact the franchisee's ability to sell their business to a party of their choosing and under terms they negotiate without the franchisor's intervention.