Does Carls Jr. segregate the Production Fund and the Media Fund from its other monies?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
CJR shall separately account for the Production Fund and the Media Fund, but neither of the funds shall be required to be segregated from CJR's other monies. None of the funds shall be used to defray any of CJR's general operating expenses. Each fund may hire employees, either full-time or part-time, for its administration. CJR and its affiliates may be reimbursed by each fund for expenses directly related to the fund's marketing programs including, without limitation, conducting market research, preparing advertising, promotions and marketing materials, and collecting and accounting for contributions to each fund. CJR may spend in any fiscal year an amount greater or less than the aggregate contribution of all Carl's Jr. Restaurants to each fund during that year or cause each fund to invest any surplus for future use by the fund. A statement of monies collected and costs incurred by each fund shall be prepared annually and shall be furnished to Franchisee within a reasonable period of time following a written request. CJR or its designee will have the right to cause each fund to be incorporated or operated through an entity separate from CJR at such time as CJR or its designee deems appropriate, and such successor entity shall have all rights and duties of CJR pursuant to this Section 8.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to Carls Jr.'s 2025 Franchise Disclosure Document, the Production Fund and the Media Fund are not required to be segregated from Carls Jr.'s other monies. However, Carls Jr. must separately account for the Production Fund and the Media Fund. These funds cannot be used to cover Carls Jr.'s general operating expenses.
Carls Jr. may hire employees for the administration of each fund and can be reimbursed by each fund for expenses directly related to the fund's marketing programs. These expenses include conducting market research, preparing advertising, promotions, and marketing materials, and collecting and accounting for contributions to each fund.
Carls Jr. has the discretion to spend more or less than the aggregate contribution of all Carls Jr. Restaurants to each fund in any fiscal year. They can also cause each fund to invest any surplus for future use. Franchisees are entitled to receive an annual statement of monies collected and costs incurred by each fund upon written request. Carls Jr. has the right to incorporate each fund or operate it through a separate entity.