Under the Carls Jr. lease agreement, can the tenant assign the lease?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Tenant may assign the Lease, or any right or rights therein (including without limitation purchase options or rights of first refusal), to CJR or its parent, affiliates or subsidiaries (without Landlord's consent) or its designee (with Landlord's consent which consent shall not be unreasonably withheld) and without payment of any assignment fee or similar charge or increase in any rentals or other charges payable to Landlord.
Landlord consents to Tenant's collateral assignment of the Lease to CJR or its designee, granting CJR the option, but not the obligation, to assume the Lease and/or any or all rights therein.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the tenant, who is the franchisee, has the ability to assign the lease under specific conditions. The franchisee can assign the lease to CJR (Carl's Jr. Restaurants LLC) or its parent company, affiliates, or subsidiaries without needing the landlord's consent. This provides Carls Jr. with flexibility in managing the real estate and operations of its franchised locations.
However, if the franchisee wishes to assign the lease to any other party, they must obtain the landlord's consent. The FDD stipulates that the landlord cannot unreasonably withhold this consent. This clause protects the franchisee's ability to transfer the lease to a suitable third party, while also ensuring the landlord maintains some control over who occupies their property. Additionally, no assignment fee or increase in rentals or other charges can be levied by the landlord for assignments to CJR or its affiliates.
Furthermore, the landlord consents to a collateral assignment of the lease to CJR or its designee. This gives CJR the option, but not the obligation, to assume the lease and all associated rights. This collateral assignment provides Carls Jr. with a mechanism to step in and take over the lease if the franchisee defaults or fails to renew the lease, ensuring continuity of operations at the location. These provisions are designed to balance the interests of the franchisee, the franchisor (Carls Jr.), and the landlord, providing a framework for lease management and potential transfer scenarios.