Under the Carls Jr. Development Agreement, are there any geographic restrictions on where I can advertise or solicit customers, besides the Internet restrictions mentioned in Item 13?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
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, under the Development Agreement, there are generally no geographic restrictions on where a franchisee may advertise or solicit customers for their franchised restaurants. However, Item 13 of the FDD contains information about Internet restrictions that do apply. Carls Jr. retains all rights to use and license the Carls Jr. system, except for the specific rights granted to the franchisee in the Development Agreement and Franchise Agreement.
Carls Jr. also faces no restrictions on where it may advertise or solicit customers, and it is not obligated to compensate the franchisee for soliciting or accepting orders from within the Development Territory. This means that Carls Jr. itself can market to customers in the same area as the franchisee's restaurants without any limitations.
This lack of geographic advertising restrictions provides franchisees with the flexibility to market their restaurants as they see fit, but it also means they may face competition from both Carls Jr. itself and other franchisees in the broader market. Prospective franchisees should carefully review Item 13 to understand the specific Internet restrictions that apply to their advertising and solicitation efforts.