During the term of the Franchise Agreement, are both the Franchisee and the Operating Principal required to devote their full-time efforts to the development, management, and operation of the Carls Jr. Franchised Restaurant?

According to Carls Jr.'s 2025 Franchise Disclosure Document, both the franchisee and the Operating Principal are required to devote their full-time efforts to the development, management, and operation of the franchised restaurant during the term of the Franchise Agreement. This is a standard requirement in franchising, ensuring that the franchisee is actively involved in the business and committed to its success.

This requirement has significant implications for a prospective Carls Jr. franchisee. It means that the franchisee cannot be a passive investor but must be actively engaged in the day-to-day operations of the restaurant. For an individual franchisee, this may mean leaving other employment to focus solely on the Carls Jr. business. For a corporate franchisee, it means ensuring that the Operating Principal is dedicated to the Carls Jr. restaurant and not distracted by other business ventures.

The FDD also specifies conditions for the Operating Principal, including equity ownership, control over day-to-day activities, and residency requirements. These conditions are designed to ensure that the Operating Principal is qualified and committed to managing the Carls Jr. restaurant effectively. Franchisees should carefully consider these requirements and ensure that they can meet them before investing in a Carls Jr. franchise.