Under what condition is a Carls Jr. franchisee required to designate and retain a Multi-Unit Manager?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
istance of the Franchised Restaurant, unless waived in writing by us. The Operating Principal will be required to successfully complete the FMTP and any additional training required by us. If you operate restaurants in multiple markets that are franchised by us or our affiliates, an individual meeting the above qualifications will serve as the Operating Principal in at least one market.
If you operate restaurants that are franchised by us or our affiliates in multiple geographic markets, for all markets in which the Operating Principal fails to satisfy our requirements, you must designate and retain an individual to serve as Multi-Unit Manager. The Multi-Unit Manager will be under the supervision of the Operating Principal. The Multi-Unit Manager must devote full time and best efforts to supervising the operation of the Franchised Restaurant and those other restaurants (that are franchised by us or our affiliates) operated by you in the same geographic market, successfully complete the FMTP and any additional training required by us, and be approved by us. In addition, the Multi-Unit Manager must maintain his/her primary residence within a reasonable driving distance of the Franchised Restaurant, unless waived in writing by us.
The Development Principal must own at least a 10% equity ownership interest in you, or in your general partner if you are a limited partnership, unless modified by us in our sole discretion. (This requirement does not apply if you were a publicly-held entity or a wholly-owned subsidiary of a publiclyheld entity as of the date of the first franchise-related agreement between you and us.) The Development Principal must be a member of the Continuity Group and have full control over the day-to-day development of the Franchised Restaurants.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 59–61)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee is required to designate and retain a Multi-Unit Manager under specific circumstances related to the operation and development of multiple franchise locations. If a franchisee operates restaurants franchised by Carls Jr. or its affiliates in multiple geographic markets, they must designate and retain a Multi-Unit Manager for any market where the Operating Principal fails to meet Carls Jr.'s requirements. This manager will be under the supervision of the Operating Principal. Similarly, if a franchisee is developing franchised restaurants in multiple geographic markets, they must designate and retain a Multi-Unit Development Manager for all markets in which the Development Principal fails to satisfy Carls Jr.'s requirements. This manager will be under the supervision of the Development Principal.
The Multi-Unit Manager, whether for operations or development, must devote their full time and best efforts to supervising the relevant activities—either the operation or the development—of the Carls Jr. restaurants within their assigned geographic market. They must also successfully complete the Franchise Management Training Program (FMTP) and any additional training required by Carls Jr., and they must be approved by Carls Jr. Furthermore, the Multi-Unit Manager is typically required to maintain their primary residence within a reasonable driving distance of the Franchised Restaurant or Development Territory, although this requirement can be waived in writing by Carls Jr.
These requirements ensure that Carls Jr. maintains consistent standards and effective oversight across all franchised locations, especially when a franchisee is managing multiple units in different areas. By mandating a Multi-Unit Manager under these conditions, Carls Jr. aims to address potential gaps in operational or developmental oversight, ensuring that each market receives the necessary attention and expertise. This structure helps to uphold the brand's quality and consistency, which is crucial for maintaining customer satisfaction and overall franchise success. Prospective franchisees should carefully consider these requirements, especially if they plan to expand into multiple geographic markets, as it will impact their operational and staffing responsibilities.