Bottom line
- Total investment $1.5M – $3.2M including a $25K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $1.4M/year (median $1.3M). Estimated payback in 6.3 years.
- Rated STRONG with a risk score of 48/100. SBA loan default rate of 0.0% across 19 loans (below the industry average).
- No protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Carl's Jr. unit return on the cash you put in?
Unlevered ROIC · per unit
7%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Carl's Jr. units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.4M
on $7.0M purchase
Total debt
$5.6M
SBA $3.5M + senior + seller note
Overview
About
Carl's Jr. franchisees operate quick-service restaurants serving flame-grilled burgers, chicken sandwiches, and sides. Day-to-day responsibilities include managing kitchen and counter staff, inventory procurement, food preparation oversight, customer service, drive-thru operations, and local marketing—with performance directly dependent on local foot traffic and competitive positioning.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 16 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Carl's Jr. presents elevated risk due to system contraction, unprotected territory in a declining brand, significant litigation including disclosure violations, and unverifiable financial performance claims—suitable only for operators with multi-unit experience and capital reserves.
Score breakdown · what drove the 48 / 100 rating
- 01MINORDeclining unit count (-0.6% YoY) indicates system contraction despite 20-year terms
- 02MINORHigh initial investment ($1.49M-$3.18M) with unprotected territory creates cannibalization risk
- 03HIGHMaterial litigation history including Canadian disclosure violations, non-compete enforcement actions, and cybersecurity breaches affecting franchisee reputation
- 04MINOR4% royalty on average $1.4M revenue yields only ~$56K annual royalties, suggesting thin operator margins after $371K net income claims
- 05MINORNo protected territory in declining system means new units directly compete with existing franchisees
- 06MEDMissing Item 19 financial performance representations limits ability to validate the disclosed $371,978 average net income claim
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Carl's Jr. · FDD (2024) PDF