When is the Royalty fee due for a Carls Jr. franchise?

Question

Accepted Answer

dates | Actual cost of updates                                                                                                                                                                                                                         | As incurred                                                   | The Franchise Agreement gives us the right to require you, at your expense, to use any software or other technology that we may designate or develop in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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| Type of Fee (1)                     | Amount                                                                                     | Due Date                                                   | Remarks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-------------------------------------|--------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Costs and Attorneys' Fees        | CJR's costs and expenses                                                                | As incurred                                                | If we prevail in litigation regarding enforcement of the terms of any agreement with you, you must pay our attorneys' fees and costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Carl's Jr. Renewal Fee           | \$5,000 for a renewal term of 5 years; \$10,000 for a renewal term of 10 years | At the time the new franchise agreement is signed | We reserve the right to prorate the Renewal Fee to align with a renewal term with a corresponding lease expiration date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Liquidated Damages                  | As calculated (see Remarks)                                                             | As incurred                                                | If the Franchise Agreement is terminated following your default, since it would be difficult, if not impossible, to determine the amount of damages that we will suffer as a result of your breach, unless waived by us in our sole discretion, you must immediately pay us, as damages and not as a penalty, the amount of the royalty fee that you would have paid during the period ("Damages Period") from the effective date of termination to the earlier of: (a) the 3-year anniversary of the effective date of termination; or (b) the date on which the initial term of the Franchise Agreement was scheduled to expire. The amount of such royalty fee during the Damages Period will be calculated by multiplying the average weekly royalty fee that you owed for the 52-week period prior to the effective date of termination by the number of weeks in the Damages Period. |
| Collection Costs and Expenses    | CJR's costs and expenses                                                                | On demand, if required                                  | These costs and expenses include, but are not limited to, costs and commissions due a collection agency, reasonable attorneys' fees, costs incurred in creating or replicating reports demonstrating Gross Sales of the Franchised Restaurant, court costs, expert witness fees, discovery costs and reasonable attorneys' fees and costs on appeal, together with interest charges on all of the foregoing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Relocation                          | CJR's reasonable expenses                                                               | On demand, if required                                  | You may not relocate the Franchised Restaurant without CJR's prior written consent, which may be withheld by CJR in its sole discretion. If we approve a relocation of your Franchised Restaurant, we have the right to charge you for all reasonable expenses actually incurred in connection with consideration of the request.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Reimbursement of Insurance Costs | Cost of obtaining coverage                                                              | Immediately upon receipt of invoice                  | If you fail to procure or maintain the required insurance, we may procure the insurance and charge its cost along with our out-of-pocket expenses to you. We collect the cost of the insurance coverage for the insurance company with which we place the coverage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

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| Type of Fee (1)                                     | Amount                                                                                                | Due Date    | Remarks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------------------------------|-------------------------------------------------------------------------------------------------------|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Web Site Fee                                        | Actual cost of developing, reviewing, securing, protecting and/or hosting the web site | As incurred | CJR has the right to charge you a fee for developing, reviewing and approving your web site and/or securing, protecting and hosting the web site.

Source: Item 6 — Other Fees (FDD pages 28–35)

When is the Royalty fee due for a Carls Jr. franchise?

Answer from 2025 FDD Document

What This Means (2025 FDD)

Type of Fee (1)	Amount	Due Date	Remarks
Costs and Attorneys' Fees	CJR's costs and expenses	As incurred	If we prevail in litigation regarding enforcement of the terms of any agreement with you, you must pay our attorneys' fees and costs.
Carl's Jr. Renewal Fee	$5,000 for a renewal term of 5 years; $10,000 for a renewal term of 10 years	At the time the new franchise agreement is signed	We reserve the right to prorate the Renewal Fee to align with a renewal term with a corresponding lease expiration date.
Liquidated Damages	As calculated (see Remarks)	As incurred	If the Franchise Agreement is terminated following your default, since it would be difficult, if not impossible, to determine the amount of damages that we will suffer as a result of your breach, unless waived by us in our sole discretion, you must immediately pay us, as damages and not as a penalty, the amount of the royalty fee that you would have paid during the period ("Damages Period") from the effective date of termination to the earlier of: (a) the 3-year anniversary of the effective date of termination; or (b) the date on which the initial term of the Franchise Agreement was scheduled to expire. The amount of such royalty fee during the Damages Period will be calculated by multiplying the average weekly royalty fee that you owed for the 52-week period prior to the effective date of termination by the number of weeks in the Damages Period.
Collection Costs and Expenses	CJR's costs and expenses	On demand, if required	These costs and expenses include, but are not limited to, costs and commissions due a collection agency, reasonable attorneys' fees, costs incurred in creating or replicating reports demonstrating Gross Sales of the Franchised Restaurant, court costs, expert witness fees, discovery costs and reasonable attorneys' fees and costs on appeal, together with interest charges on all of the foregoing.
Relocation	CJR's reasonable expenses	On demand, if required	You may not relocate the Franchised Restaurant without CJR's prior written consent, which may be withheld by CJR in its sole discretion. If we approve a relocation of your Franchised Restaurant, we have the right to charge you for all reasonable expenses actually incurred in connection with consideration of the request.
Reimbursement of Insurance Costs	Cost of obtaining coverage	Immediately upon receipt of invoice	If you fail to procure or maintain the required insurance, we may procure the insurance and charge its cost along with our out-of-pocket expenses to you. We collect the cost of the insurance coverage for the insurance company with which we place the coverage.