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Under the Carls Jr. franchise agreement, what is the 'Development Territory' defined as, and where can it be found?

Q: Under the Carls Jr. franchise agreement, what is the 'Development Territory' defined as, and where can it be found?

#### **RECITALS:** - D. Developer desires to be granted the opportunity, subject to the terms and conditions of this Agreement, to develop franchised Carl's Jr. Restaurants ("Franchised Restaurant(s)") in the limited geographic area described in attached Appendix A ("Development Territory"). **NOW THEREFORE**, in consideration of CJR's grant to Developer of the right to develop Franchised Restaurants in the Development Territory during the term of this Agreement ("Development Term"), as well as the mutual covenants, agreements and obligations set forth below, the parties agree as follows: Source: Item 23 — RECEIPTS (FDD pages 76–364)

Carls_Jr Franchise · 2025 FDD

Answer from 2025 FDD Document

RECITALS:

D. Developer desires to be granted the opportunity, subject to the terms and conditions of this Agreement, to develop franchised Carl's Jr. Restaurants ("Franchised Restaurant(s)") in the limited geographic area described in attached Appendix A ("Development Territory").

NOW THEREFORE, in consideration of CJR's grant to Developer of the right to develop Franchised Restaurants in the Development Territory during the term of this Agreement ("Development Term"), as well as the mutual covenants, agreements and obligations set forth below, the parties agree as follows:

Source: Item 23 — RECEIPTS (FDD pages 76–364)

What This Means (2025 FDD)

According to the 2025 Carls Jr. Franchise Disclosure Document, the 'Development Territory' is a limited geographic area described in attached Appendix A. The developer is granted the opportunity to develop franchised Carls Jr. Restaurants within this territory, subject to the terms and conditions outlined in the Development Agreement.

The Development Agreement grants the developer the right to develop franchised restaurants in the Development Territory during the Development Term. This term begins when the agreement is signed by Carls Jr. and ends when the last franchised restaurant required by the Development Schedule in Appendix B opens or was required to open. It's important to note that the agreement itself is not a franchise agreement but rather an opportunity to enter into separate Franchise Agreements for specific locations within the Development Territory that are accepted by Carls Jr.

Carls Jr. retains the right to enter into agreements with other developers and franchisees that may differ from the current agreement. The developer is still obligated to comply with the terms of their specific agreement. Upon termination or expiration of the Development Agreement, the developer loses the right to develop or open further franchised restaurants in the Development Territory, although they can complete and open restaurants for which a Franchise Agreement has already been executed. The limited exclusive rights within the Development Territory then terminate, allowing Carls Jr. to operate or license others to operate Carls Jr. restaurants anywhere within that territory.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.

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