Carl's Jr. Franchise Cost, Revenue & Review 2026
- Investment
- $1.5M – $3.2M
- Disclosed sales
- $1.4M
- gross sales, not profit
- SBA charge-off
- Limited · 34 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Carl's Jr. is a quick-service burger franchise known for large, charbroiled burgers and indulgent menu items. Franchisees run restaurants managing kitchen and counter staff, drive-thru operations, and local marketing.
FranchiseVerdict summary · 2026
A Carl's Jr. franchise requires a total initial investment of $1.5M – $3.2M, including a $25K franchise fee and an ongoing 4.0% royalty[2]. Per the 2024 FDD, average unit revenue was $1.4M[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2024 filing · Data extracted: · Last cited check: · Staleness risk: high - figures are from a filing two or more years old
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $1.5M – $3.2M
- 97th pct Service Resta…
- Avg gross sales
- $1.4M
- 27th pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 1,063
- 93rd pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $1.5M – $3.2M including a $25K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.4M/year (median $1.3M), with an estimated 9% cash-on-cash return (based on EBITDAR9).
- RISKVerdict B (Above average), verdict score 66/100 (higher is better).
- GROWTHNegative: net -6 franchised outlets in the latest year (9 opened, 15 closed); 7 signed but not yet open (Item 20).
- TERMSNo 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
Corporate structure & franchisor financials
- Legal entity
- Carl's Jr. Restaurants LLC
- Parent company
- CKE Restaurants Holdings, Inc.
- FDD Item 1, page 10 of the 2024 FDD
- Ultimate parent
- CKE Inc.
- FDD Item 1, page 10 of the 2024 FDD
- Predecessor
- Carl Karcher Enterprises, Inc.
- Prior franchisor entity
- CEO title
- Chief Executive Officer
- Christopher Maxwell Wetzel
- Incorporated in
- DE
- HQ
- 6700 Tower Circle, Suite 1000, Franklin, TN 37067
- Auditor
- KPMG LLP
- Audited financials
- Franchisor revenue
- $661.6M
- vs $645.1M prior year
Overview
About
- CEO
- Christopher Maxwell Wetzel
- Headquarters
- TN
- Founded
- 1966
- FDD year
- 2024
- States available
- 15
Can you afford it, and what does the money buy?
Entry cost runs 380% above the typical quick-service restaurants franchise.
Source: FDD 2024 · Items 5–7
FDD Item 7 · 2024 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $25K | $25K |
| Working capital (3–6 mo) | $160K | $250K |
| Equipment, build-out, other | $1.3M | $2.9M |
| Total initial investment | $1.5M | $3.2M |
Source: Carl's Jr. 2024 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.5M – $3.2M
- Bottom third — review vs category
- Liquid capital req'd
- $160K – $250K
- Bottom third — review vs category
- Franchise fee
- $25K – $25K
- Top 40% of category vs category
- Royalty
- 4.0%
- typical 6–8%
- Ad fund
- 6.0%
- typical 3–5%
- Total fee load
- 0.1%
- vs 9–13% typical
- Payback period
- 11.4 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 6.0% of gross sales |
| Technology fee | $120 |
| Training fee | $500 |
| Transfer fee | $3K |
| Renewal fee | $10K |
| Inventory (initial) | $12K – $14K |
| Total fee load | 0.1% of rev |
A 0.1% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 44% above the quick-service restaurants norm.
Source: FDD 2024 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Carl's Jr. until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$2.5M
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
FDD-reported earnings
The FDD reports $372K as EBITDAR9. This is a disclosed figure, not our estimate — we publish no modelled profit for Carl's Jr..
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Carl's Jr. unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2024 FDD
Financial Performance
- Avg gross sales
- $1.4M
- Per unit, per year
- Median gross sales
- $1.3M
- Avg ebitdar9
- $372K
- Reported as EBITDAR9 in FDD Item 19
- Cash-on-cash
- 8.8%
- Based on EBITDAR9 / investment midpoint
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales
- Sample size
- 905 outlets
- vs category median 19 · large
- Range (low → high)
- $417K→$3.5MCited, not corroborated — printed on page 68 of the 2024 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $945K→$1.9M
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2024
- The FDD edition these figures were read from
- Transparency
- 10 / 10
- vs category median 4 / 10 · above
Compared against 781 Quick-Service Restaurants brands
Revenue is only 0.6x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.4M/year in gross sales. Revenue-to-investment ratio: 0.6x.
Fee burden
Total ongoing fee load of 0.1% — below the Quick-Service Restaurants median of 7.5%.
Disclosure
Transparency score 10/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System roughly stable (-0.4% 3-year CAGR) with 1,063 units.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants medians
How Carl's Jr. Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,063
- Opened
- 9
- Last reporting year
- Closed
- 15
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.4%
- Company-owned
- 49
- Corporate units in the system
- % franchised
- 95%
- vs corporate-owned
- Net growth (3-yr)
- -0.4%
- Net unit change over 3 years
- 3-yr CAGR
- -0.4%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 1
- Not renewed
- 1
- Reacquired
- 1
- Franchisor bought back
- Signed, not yet open
- 7
- 0.01 per open outlet · Item 20 Table 5
- Projected new
- 10
- Franchisor's next-year forecast
- Transfer rate
- 3.1%
- Owners selling to other franchisees
- Continuity rate
- 98.5%
- Units that stayed open
- Termination rate
- 0.2%
- Franchisor-initiated terminations
- Ceased ops
- 1.1%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 15 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
1,008 current owners across 15 states.
- CA 605
- AZ 73
- OR 57
- CO 46
- NV 44
- UT 42
- OK 36
- WA 32
- TX 29
- ID 18
- NM 16
- AK 4
- +3 more states
Counts only, from the list the franchisor prints in Item 20; 1 entries carry no state. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 34
- Loan volume
- $43.2M
- Median loan
- $1.7M
- 50th percentile
- Charge-off rate
- Limited · 34 loans
- Limited SBA coverage: 34 loans, rate hidden until 10 have resolved and loans reach 2% of franchised units
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Limited · 34 loans
- 5-yr charge-off
- Limited · 34 loans
- Loans approved 2021+
- Active lenders
- 12
- Defaults
- 0
- Typical loan rate
- 5.9%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- n=12,827 loans
- Jobs supported
- 1,182
- 4.5 per loan
- Lender concentration
- 13%
- top lender's share
Borrower mix: 33% went to startups / new businesses, 67% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 10.8% vs 10.0% for independents — franchising is associated with 8% higher SBA default risk in this category.
Top lenders financing Carl's Jr. franchisees
Showing 3 of 12 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Carl's Jr. from SBA 7(a) FOIA data.
- Principal loss rate
- 0.0%
- Avg SBA guarantee
- 73%
- Avg interest rate
- 5.87%
- Lender concentration
- 13.3%
- Job velocity
- 4.5 per $100K
- NAICS benchmark
- 8.7%
- NAICS 722513
- Jobs supported
- 1,182
Top SBA lendersTop lender holds 13% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Heritage Bank of Commerce | 2 | $1.4M | 0.0% |
| 2 | First Interstate Bank | 2 | $600K | 0.0% |
| 3 | Western Alliance Bank | 2 | $2.7M | N/A |
| 4 | Wells Fargo Bank National Association | 1 | $265K | 0.0% |
| 5 | Zions Bank, A Division of | 1 | $1.8M | 0.0% |
| 6 | T Bank, National Association | 1 | $2.8M | 0.0% |
| 7 | BankUnited, National Association | 1 | $1.7M | N/A |
| 8 | United Business Bank | 1 | $5.0M | 0.0% |
| 9 | SMBC MANUBANK | 1 | $600K | 0.0% |
| 10 | Evolve Bank and Trust | 1 | $1.8M | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| CACalifornia | 6 | 0 | 0.0% |
| WAWashington | 3 | 0 | 0.0% |
| AZArizona | 2 | 0 | -- |
| IDIdaho | 2 | 0 | 0.0% |
| NVNevada | 1 | 0 | -- |
| TXTexas | 1 | 0 | -- |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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.
Why this reads harsher than the B grade: the grade weighs financial health, unit economics, unit growth, scale, legal, and transparency across the whole filing, while this summary lists individual flags without that weighting. The flags are worth checking with current owners; neither is investment advice.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
6 concluded matters: (1) 6Points Food Services v. CJR – franchise rescission/breach, settled $5.5M USD; (2) Harris v. CJ Star/CJR – anti-trust/no-hire, settled $25K; (3) Rice v. By The Rio/CJR – anti-trust/no-hire, settled $10K; (4) CA v. Arby's (affiliate) – no-poaching; (5) CA v. Dunkin' Brands (affiliate) – no-poaching; (6) NY v. Dunkin' Brands (affiliate) – data breach, $650K penalty.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · KPMG LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Audited combined consolidated financials are for "The CKE Securitization Entities" (Carl's Jr. SPV Guarantor LLC and subsidiaries, and Hardee's SPV Guarantor LLC and subsidiaries) for fiscal years ended Jan 29, 2024 (FY2024) and Jan 30, 2023 (FY2023), not the named franchisor Carl's Jr. Restaurants LLC alone. Amounts originally stated in thousands. Net worth is members' deficit of $(237,628)K. Audited by KPMG LLP, Nashville, TN, dated April 10, 2024.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 66 / 100 verdict
- 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
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 0.1% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 2 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Arbitration location | TN |
| Jury trial waiver | Yes |
| Governing law | TN |
| Litigation count | 6 |
View Item 3 litigation summary
6 concluded matters: (1) 6Points Food Services v. CJR – franchise rescission/breach, settled $5.5M USD; (2) Harris v. CJ Star/CJR – anti-trust/no-hire, settled $25K; (3) Rice v. By The Rio/CJR – anti-trust/no-hire, settled $10K; (4) CA v. Arby's (affiliate) – no-poaching; (5) CA v. Dunkin' Brands (affiliate) – no-poaching; (6) NY v. Dunkin' Brands (affiliate) – data breach, $650K penalty.
Items 10, 11
Training & Operations
- Classroom training
- 0 hrs
- On-the-job training
- 328 hrs
- Training location
- Anaheim, CA or Franklin, TN (designated training facility) plus in-restaurant and online (Star University)
- Ongoing training
- Required
- Site selection
- Franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- PAR Brink / PAR ES600 or ES8500
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: PAR Brink / PAR ES600 or ES8500
Item 20 · call current owners
Franchisee Contacts
1,009 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Carl's Jr. franchise?
The total investment to open a Carl's Jr. franchise ranges from $1.5M – $3.2M, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Carl's Jr. franchise owners earn?
According to Item 19 of the Carl's Jr. FDD, the average gross sales per unit is $1.4M. The median is $1.3M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Carl's Jr.?
Carl's Jr. is franchised by Carl's Jr. Restaurants LLC. Its parent company is CKE Restaurants Holdings, Inc.. The ultimate parent named in the FDD is CKE Inc.. Source: FDD Item 1, 2024 filing.
What is Item 19 in the Carl's Jr. FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Carl's Jr. FDD and qualifies whose outlets they describe.
What is Carl's Jr.'s franchise failure rate?
SBA 7(a) loan charge-off data is not available for Carl's Jr. (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Carl's Jr. franchise locations are there?
As of their most recent FDD filing, Carl's Jr. has 1,063 total units in the United States, including 1,014 franchised units and 49 company-owned units. 9 new units were opened in the latest reporting year.
Is Carl's Jr. a good franchise to buy?
FranchiseVerdict rates Carl's Jr. as a B-grade franchise with a verdict score of 66 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.