Under the Carls Jr. Development Agreement, am I guaranteed an exclusive territory?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive an exclusive territory under the Development Agreement. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
There are no restrictions on the areas in which you may advertise or solicit customers for your Franchised Restaurants; however, see Item 13 for Internet restrictions. We reserve all rights to use and license the Carl's Jr. System other than those we expressly grant you under the Development Agreement, the Franchise Agreement. There are no restrictions on the areas in which we may advertise or solicit customers, nor must we pay any compensation to you for soliciting or accepting orders from inside the Development Territory. The rights we reserve include the right to use any other channel of distribution, including the Internet, to make sales in the Development Territory using the Proprietary Marks or different proprietary marks.
Source: Item 12 — TERRITORY (FDD pages 55–56)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, franchisees operating under a Development Agreement will not receive an exclusive territory. This means that as a Carls Jr. franchisee, you may face competition from other franchisees, outlets owned by Carls Jr. itself, or other channels of distribution or competitive brands that Carls Jr. controls.
This lack of an exclusive territory means that Carls Jr. is not restricted from opening additional franchises or operating company-owned stores in the same area as your franchised restaurant. Furthermore, Carls Jr. retains the right to use and license the Carl's Jr. system through other channels of distribution, including the internet, without compensating you, even if these sales occur within your development territory.
While there are no restrictions on where you can advertise or solicit customers (subject to internet restrictions outlined in Item 13), Carls Jr. similarly faces no restrictions on soliciting customers in your area and is not obligated to compensate you for orders they solicit or accept from within your territory. This open competition can impact your potential customer base and revenue. Prospective franchisees should carefully consider the potential for competition when evaluating a Carls Jr. franchise opportunity.