Under what circumstances will the closing of a Carls Jr. franchise transfer be accomplished through an escrow?

Based on the 2025 Carls Jr. Franchise Disclosure Document, the circumstances under which the closing of a purchase will occur, potentially involving an escrow, relate to Carls Jr.'s option to purchase the assets of a franchised restaurant. Specifically, if Carls Jr. exercises its option to purchase the assets from a franchisee, the purchase price is to be paid in cash or cash equivalents at the closing of the purchase.

The closing must occur no later than 60 days after the date of Carls Jr.'s purchase notice. While the document specifies the timing and method of payment (cash or cash equivalents), it does not explicitly detail whether an escrow account will be used to facilitate the transaction. The FDD states that the purchase price will be paid at the closing, but it does not specify the mechanism for holding and disbursing those funds.

Therefore, while the FDD outlines the conditions under which Carls Jr. may purchase a franchisee's assets and the timeline for payment, it remains unclear whether an escrow service is utilized during the closing process. A prospective franchisee should seek clarification from Carls Jr. regarding their standard procedures for handling funds during the transfer of assets, including whether an escrow account is typically used to ensure a smooth and secure transaction.