Carl’s Jr. Franchise Cost & Fees

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Description

Year Business Began: 1945Franchising Since: 1984Headquarters: Franklin, TennesseeEstimated Number of Units: 1,615Franchise Description: Carl’s Jr. Restaurants LLC (CJR) is the franchisor. Carl’s Jr. Restaurants are quick service restaurants offering a limited menu of breakfast, lunch and dinner products and featuring charbroiled 100% Black Angus Thickburger sandwiches, Hand-Breaded Chicken Tenders, Made from Scratch Biscuits, and other related quick serve menu items, or a quick service restaurant under the names “Carl’s Jr.” and “Green Burrito,” featuring, in addition to the products previously mentioned, a limited menu of Mexican food products (Dual Concept Restaurant).Training Overview: The franchisor may require those individuals who will have a 10% or greater interest in the franchise entity to attend a 10-Day Operations Overview before it will commit to enter into any other agreement. The 10-Day Operations Overview will be conducted at those locations specified by the franchisor. The franchisor currently provides, at no charge for franchisees, their Operating Principal (if not previously trained), their General Manager and six other employees who they have hired as Shift Leaders, the FMTP, provided the training takes place within two years of the signing the Franchise Agreement, in the operation of a Carl’s Jr. Restaurant at those times and places designated by the franchisor. The minimum length of the FMTP is eight consecutive weeks; however, depending on the prior experience of the trainee, the FMTP could be shorter or longer. In addition, the franchisee’s General Manager and two Shift Leaders must attend an additional two weeks of Shift Control training. The franchisor has the right to require that franchisees, their owners, their Operating Principal, their General Manager and any other employees hired by franchisees to fill certain designated positions take and successfully complete other training courses in addition to the FMTP.Territory Granted: Franchisees will not receive any exclusive territory under the Commitment Agreement or the Franchise Agreement. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. Franchisees do not receive the right, under either the Commitment Agreement or the Franchise Agreement, to develop or operate more than one Franchised Restaurant. The franchisor’s prior written consent is required before a franchisee relocates the Franchised Restaurant.Obligations and Restrictions: Franchisees are not obligated to participate personally in the direct operation of the Franchised Restaurant; however, franchisees must designate, and the franchisor must approve, a qualified individual to serve as the “Operating Principal” of the Franchised Restaurant. The Operating Principal must own at least a 10% equity ownership interest in the franchise, or in the general partner if the franchisee is a limited partnership, unless modified by the franchisor in its sole discretion, and be a person acceptable to both the franchisor and the franchisee. Franchisees must use the Franchised Restaurant solely for the operation of the Carl’s Jr. Restaurant, or if applicable, the Dual Concept Restaurant, and must maintain sufficient inventories, adequately staff each shift with qualified employees and continuously operate the Franchised Restaurant at its maximum capacity and efficiency for the minimum number of days and hours as specified in the manual or otherwise in writing. Franchisees must operate the Franchised Restaurant in strict conformity with the methods, standards and specifications that we prescribe in the Manual or otherwise in writing.Term of Agreement and Renewal: The length of the initial franchise term is 20 years from the date the franchised restaurant opens for business. If franchisees are converting a Carl’s Jr. Restaurant to a Dual Concept Restaurant, the term of the right to operate the Dual Concept Restaurant will be the balance of the term of the Franchise Agreement. Franchisees can renew for a Renewal Term of 10 years or, at their option, five years, if requirements are met.Financial Assistance: Neither the franchisor nor any of its agents or affiliates offer direct or indirect financing to franchisees, guarantee any of their notes, leases or obligations, or have any practice or intent of selling, assigning or discounting to a third party all or any part of any of their financing arrangements. Investment Tables: Estimated Initial Investment Name of Fee Low High Initial Franchise Fee $15,000 $35,000 Opening Training Support Team Free $0 $10,000 Real Property Variable Building $575,000 $642,000 Site Improvements $250,000 $415,000 Soft Costs $90,000 $120,000 Equipment $357,000 $410,000 Signage $90,000 $110,000 Point of Sale System $35,000 $45,000 Initial Training $20,000 $60,000 Pre-Opening Costs $8,000 $23,000 Additional Funds – 3 months $160,000 $250,000 Estimated Total for a Traditional Location (does not include Real Estate costs) $1,600,000 $2,120,000 GB Initial Training $0 $10,000 GB Construction/Improvements $4,500 $9,000 GB Equipment $8,000 $13,000 GB Signage (Exterior only) $5,000 $14,000 GB Miscellaneous Opening Costs $3,000 $3,800 GB Opening Inventory $1,500 $1,700 Estimated Total for a Dual Concept Restaurant in a Traditional Location (does not include Real Estate costs) $1,622,000 $2,171,500 Other Fees Type of Fee Amount Royalty 4% of Gross Sales. Taxes Franchisees must reimburse the franchisor for any taxes, fees or assessments imposed on us for acting as franchisor or licensing the Proprietary Marks. Advertising An advertising and promotion obligation (APO) in an amount set forth in the Franchise Agreement. The APO will be up to 7% of Gross Sales. Currently, the APO is 6% of Gross Sales. Green Burrito Advertising (if applicable) With respect to Dual Concept Restaurants, a Green Burrito APO of up to 7% of GB Gross Sales. Currently, there is no Green Burrito APO. Interest Interest on the amount owed from the date due until paid. 800 Number and Secret Shopper Programs If implemented, all costs associated with the 800 number, Secret Shopper programs or other programs as the franchisor may require. Non-Cash Payment System All costs associated with non-cash payment systems. Additional FMTP Training $500 per person per week. Additional Training Materials Varies. Food and Safety Training Program Varies. Audit and Inspection Costs Deficiency in royalty fees and advertising contributions, plus interest. Transfer Maximum of $2,500 Indemnification The losses and expenses incurred by the franchisor and its affiliates. New Product and Supplier Testing Reasonable cost of inspection and actual cost of testing; $1,500 fee for inspection must be paid as a deposit. Software License Fee Currently $180 per Franchised Restaurant per fiscal period. Software Updates Actual cost of updates. Costs and Attorney’s Fees The franchisor’s costs and expenses. Carl Jr.’s Renewal Fee $5,000 for a renewal term of 5 years or less or $10,000 for a renewal term greater than 5 years, but no more than 10 years. Green Burrito Renewal Fee $2,500 for a renewal term of 5 years or less or $5,000 for a renewal term greater than 5 years, but not more than 10 years. Collection Costs and Expenses The franchisor’s costs and expenses. Relocation The franchisor’s reasonable expenses. Reimbursement of Insurance Costs Cost of obtaining coverage. Web Site Fee Actual cost of developing, reviewing and/or hosting the web site. The above information has been taken from the FDD of Carl’s Jr. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
Royalty 4% of Gross Sales.
Taxes Franchisees must reimburse the franchisor for any taxes, fees or assessments imposed on us for acting as franchisor or licensing the Proprietary Marks.
Advertising An advertising and promotion obligation (APO) in an amount set forth in the Franchise Agreement. The APO will be up to 7% of Gross Sales. Currently, the APO is 6% of Gross Sales.
Green Burrito Advertising (if applicable) With respect to Dual Concept Restaurants, a Green Burrito APO of up to 7% of GB Gross Sales. Currently, there is no Green Burrito APO.
Interest Interest on the amount owed from the date due until paid.
800 Number and Secret Shopper Programs If implemented, all costs associated with the 800 number, Secret Shopper programs or other programs as the franchisor may require.
Non-Cash Payment System All costs associated with non-cash payment systems.
Additional FMTP Training $500 per person per week.
Additional Training Materials Varies.
Food and Safety Training Program Varies.
Audit and Inspection Costs Deficiency in royalty fees and advertising contributions, plus interest.
Transfer Maximum of $2,500
Indemnification The losses and expenses incurred by the franchisor and its affiliates.
New Product and Supplier Testing Reasonable cost of inspection and actual cost of testing; $1,500 fee for inspection must be paid as a deposit.
Software License Fee Currently $180 per Franchised Restaurant per fiscal period.
Software Updates Actual cost of updates.
Costs and Attorney’s Fees The franchisor’s costs and expenses.
Carl Jr.’s Renewal Fee $5,000 for a renewal term of 5 years or less or $10,000 for a renewal term greater than 5 years, but no more than 10 years.
Green Burrito Renewal Fee $2,500 for a renewal term of 5 years or less or $5,000 for a renewal term greater than 5 years, but not more than 10 years.
Collection Costs and Expenses The franchisor’s costs and expenses.
Relocation The franchisor’s reasonable expenses.
Reimbursement of Insurance Costs Cost of obtaining coverage.
Web Site Fee Actual cost of developing, reviewing and/or hosting the web site.