Carls Jr
Carl's Jr. offers quick-service restaurants featuring charbroiled burgers and chicken tenders; known for its 100% Black Angus Thickburgers and Hand-Breaded Chicken Tenders in the fast-food industry.
About Carls Jr
Carl's Jr. Restaurants LLC is an American fast-food restaurant chain owned by CKE Restaurant Holdings, Inc., who also owns Hardee's, with franchisees in North and South America, Asia, Oceania, Europe, and Africa.
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Carls Jr franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin the operation of a newly-developed Carl's Jr. Restaurant ranges from approximately $1,243,000 to $2,744,500 for a 3,200 square foot freestanding building and $1,486,000 to $2,860,135 for a 2,200 square foot freestanding building. This includes the payment of $55,000 to $99,000 to the company but does not include the cost of buying or renting the business location [p.1].
What is the initial franchise fee?
The initial franchise fee is not specified in the provided excerpts.
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is set forth in Appendix B of the Franchise Agreement [p.141], while the APO (advertising and promotion obligation) is paid weekly, with 1% going to the Production Fund and 5% to the Media Fund [p.43]. These amounts can be modified by CJR following written notice [p.145], and they are subject to a reduction based on the gross sales of the Franchised Restaurant for its first three years of operation [p.468].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is not specified in these excerpts. However, regarding renewal, if a prospective franchisee wishes to continue operating after the initial term expires, they must execute a new franchise agreement for the Renewal Term at least one month prior to the expiration of the Initial Term [p.136]. Failure to do so may result in termination of the franchise agreement [p.136].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you must notify the franchisor in writing of any proposed transfer and submit a franchise application for the proposed transferee along with relevant agreements and information requested by the franchisor [p.102]. The franchisor can consent to the transfer based on various factors deemed relevant by them in their sole discretion [p.102].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement if the franchise agreement between Customer and Operator is terminated [p.239], or if Operator no longer owns and operates the franchised location, in which case only that specific location's agreement would terminate [p.239]. Additionally, there are state laws that may supersede the agreement, including those related to termination and renewal of the franchise [p.457].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory under the Franchise Agreement [p.54, p.55]. You may face competition from other franchisees, outlets owned by CJR, or competitive brands that CJR controls [p.54, p.55].
What training and ongoing support does the franchisor provide?
The franchisor provides assistance in opening the Franchised Restaurant upon request, including training employees as deemed appropriate [p.42]. Additionally, the franchisor offers training for franchisees and their employees, fulfills duties such as managing the Carl's Jr. System, marketing new and renewal agreements, and providing support to franchisees [p.10, p.55]. Ongoing support includes development training for the Development Principal and any additional training required by the franchisor [p.60].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts. The provided FDD excerpts do not include information on the number of franchised outlets that have closed or been terminated.
Does the franchisor share any financial performance or earnings information?
Yes, the franchisor shares financial performance information. According to [p.66], the franchisor provides a financial performance representation that includes certain financial information and key performance indicators for specific franchised restaurants during a defined period. However, this information is limited to franchise-operated Carl's Jr. freestanding restaurants in the United States and does not include company-owned or operated locations, as well as those located outside the U.S., or at travel plazas, gas and convenience stores, colleges and universities, and airports. [p.72] also notes that other than this representation, no financial performance representations are made by the franchisor.
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only those products and services expressly authorized by the Operation Procedures Manual (OPM) or in writing from the franchisor. The franchisor reserves the right to change menu items, ingredients, and standards without limitation. Regarding supplies, you may have to purchase certain items from designated suppliers, such as Wasserstrom Holdings, Inc., to qualify for negotiated prices and revenue-sharing incentives [p.38]. Most food items and other goods will be purchased through a master distributor, currently DMA, but the franchisor can change this arrangement [p.36].