Under what conditions can the tenant assign the lease to Carls Jr. or its designee?

According to the 2025 Carls Jr. Franchise Disclosure Document, a tenant, typically the franchisee, has the ability to assign their lease under specific conditions. The tenant can assign the lease, or any rights within it such as purchase options or rights of first refusal, to Carls Jr. itself, or to its parent company, affiliates, or subsidiaries without needing the landlord's consent. This provides Carls Jr. with considerable flexibility in managing its real estate portfolio and allows for streamlined transitions if needed.

However, if the tenant wishes to assign the lease to a designee that is not Carls Jr. or one of its related entities, the landlord's consent is required. The FDD stipulates that this consent should not be unreasonably withheld, meaning the landlord cannot arbitrarily deny the assignment. This provision aims to balance the tenant's need for flexibility with the landlord's interest in ensuring a suitable replacement tenant. Furthermore, no assignment fee or increase in rentals or other charges can be levied by the landlord for such assignments.

This clause protects Carls Jr.'s interests and provides options for the franchisee. It ensures that Carls Jr. can step in to maintain control over the restaurant location if necessary, while also allowing the franchisee some flexibility in assigning the lease to another party, subject to the landlord's reasonable consent. This is a fairly standard practice in franchise agreements, as it allows the franchisor to maintain brand consistency and operational standards.