Under what circumstances is a Carls Jr. franchisee required to pay a Development Fee?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
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Other than these nine (9) actions, no litigation is required to be disclosed in this Item.
ITEM 4 BANKRUPTCY
No bankruptcy is required to be disclosed in this Item.
ITEM 5 INITIAL FEES
Development Fee
If you enter into a Development Agreement for the development of three (3) or more Franchised Restaurants to be located at Travel Center Locations or Gas and Convenience Locations, you must pay CJR a Development Fee of $10,000 for each Franchised Restaurant you agree to develop at the time you sign the Development Agreement (this includes the CJR 2024 Travel Center Development Incentive Program). The Development Fee is not refundable. If you execute a Franchise Agreement for a new Franchised Restaurant pursuant to the Development Agreement, the $10,000 Development Fee associated with this new Franchised Restaurant will be credited against the Initial Franchise Fee for such Franchised Restaurant. If you enter into a Development Agreement, you will execute the form of Franchise Agreement in use at the time you begin to develop the Franchised Restaurant and the respective CJR 2024 Travel Center Development Incentive Program Addendum or 2024 DIP Addendum, if applicable.
Initial Franchise Fee
The Initial Franchise Fee is $25,000, although the balance of the Initial Franchise Fee due to CJR is reduced to $15,000 for a Franchised Restaurant developed pursuant to the terms of a Development Agreement, including any Conversion Restaurant. You must pay CJR the Initial Franchise Fee, less any Development Fee already paid, when you execute the Franchise Agreement. The Initial Franchise Fee is fully earned by CJR when paid, and it is not refundable. Under the D
Source: Item 5 — INITIAL FEES (FDD pages 26–28)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a Development Fee is required when a franchisee enters into a Development Agreement to develop three or more franchised restaurants at Travel Center Locations or Gas and Convenience Locations. The Development Fee is $10,000 for each restaurant the franchisee agrees to develop and is paid when the Development Agreement is signed. This includes participation in the CJR 2024 Travel Center Development Incentive Program.
The Development Fee is non-refundable. However, when the franchisee executes a Franchise Agreement for a new restaurant under the Development Agreement, the $10,000 Development Fee associated with that restaurant will be credited towards the Initial Franchise Fee. The Initial Franchise Fee is $25,000, but is reduced to $15,000 for restaurants developed under a Development Agreement, including Conversion Restaurants.
Notably, Carls Jr. will waive the $15,000 Initial Franchise Fee for any franchised restaurant that opens 6 months prior to the contractual opening date outlined in the Development Agreement. This provides a financial incentive for franchisees to open restaurants ahead of schedule. The Development Fee structure is specific to Travel Center and Gas and Convenience Locations, indicating a targeted growth strategy for these types of venues.