Under what conditions can Carls Jr. terminate the franchise agreement if the continued operation of the restaurant poses a danger to public health or safety?

According to the 2025 Carls Jr. Franchise Disclosure Document, if Carls Jr. deems deficiencies at a franchised restaurant to create an imminent health hazard to customers, Carls Jr. may direct the franchisee to temporarily close the restaurant. This closure remains in effect until all hazards are corrected to Carls Jr.'s satisfaction, following their Closure Policy.

This clause in the franchise agreement highlights Carls Jr.'s commitment to maintaining food safety and protecting its brand reputation. It gives Carls Jr. the authority to act swiftly and decisively if a restaurant poses an immediate risk to public health. For a franchisee, this means that maintaining strict adherence to health and safety standards is not just a best practice, but a contractual obligation with serious consequences for non-compliance.

The franchisee is responsible for taking immediate steps to correct any deficiencies identified during inspections. Failure to do so can lead to a temporary closure, impacting revenue and potentially damaging the restaurant's reputation. The franchisee must work closely with Carls Jr. to address the issues and ensure that the restaurant meets the required standards before reopening.

This policy is fairly standard in the food franchise industry, as franchisors must protect their brand from damage caused by health and safety violations at individual locations. Prospective Carls Jr. franchisees should understand the importance of rigorous food safety protocols and be prepared to invest in training and equipment to maintain these standards.