Carl's Jr.Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
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]. SBA 7(a) loans show a 0.0% charge-off rate across 34 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2024 FDD issuance
Overview
- Investment
- $1.5M – $3.2M
- 99th pct Service Resta…
- Avg gross sales
- $1.4M
- 45th pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 1,063
- 94th pct Service Resta…
- SBA default
- 0.0%
- system-wide median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
At 0.6x revenue per dollar invested, this system underperforms the typical 1.5-2.5x range.
Only 0.0% of 34 SBA loans charged off, well below the 16% franchise average.
Franchising since 1984. Systems this mature have refined operations and brand recognition.
16% cash-on-cash return (based on P&L Bottom Line). Within the 15-30% range most franchise investors consider acceptable.
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), with an estimated 16% cash-on-cash return (based on P&L Bottom Line).
- Verdict A (Top Quintile) with a risk score of 26/100. SBA loan charge-off rate of 0.0% across 34 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 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
- Legal entity
- Carl’s Jr. Restaurants LLC
- Parent company
- Carl’s Jr. Funding LLC
- Incorporated in
- DE
- HQ
- 6700 Tower Circle, Suite 1000, Franklin, TN 37067
- Auditor
- KPMG LLP
- Audited financials
- Franchisor revenue
- $645.1M
- vs $661.6M prior year
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.
- CEO
- Christopher Maxwell Wetzel
- Headquarters
- TN
- Founded
- 1966
- FDD year
- 2024
- States available
- 15
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.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$168K
12.0% margin
Unlevered ROIC
7%
EBITDA / total invested capital
Payback
15.1 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.5M – $3.2M
- Below avg, review vs category
- Liquid capital req'd
- $160K – $250K
- Below avg, review vs category
- Franchise fee
- $15K – $25K
- Better than avg vs category
- Royalty
- 4.0%
- Gross Sales · typical 6–8%
- Ad fund
- 6.0%
- typical 3–5%
- Total fee load
- 10.0%
- vs 9–13% typical
- Payback period
- 6.3 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 |
| Total fee load | 10.0% of rev |
Financial Performance
- Avg gross sales
- $1.4M
- Per unit, per year
- Median gross sales
- $1.3M
- Avg p&l bottom line
- $372K
- Reported as P&L Bottom Line in FDD Item 19
- Cash-on-cash
- 16.0%
- Based on P&L Bottom Line / investment midpoint
- Item 19 type
- Historical Average Revenues and Costs
- Sample size
- 905 units
- vs category median 28 · large
- Range (low → high)
- $417K→$3.5M
- Cohort dispersion (min → max)
- Quartile band
- $945K→$1.9M
- Bottom 25% → top 25%
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 453 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.
vs Quick-Service Restaurants averages
How Carl's Jr. Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,063
- Opened
- 9
- Last reporting year
- Closed
- 14
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.3%
- Company-owned
- 49
- Corporate units in the system
- % franchised
- 95%
- vs corporate-owned
- Net growth (yr3)
- -0.6%
- Net unit change last year
- 3-yr CAGR
- -0.4%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 33
- 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 · 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 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.
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
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 12
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Carl's Jr.'s SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 6 states
- Startup risk premium and job creation velocity
- 10-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
With a 0.0% charge-off rate across 34 loans, banks have historically viewed this brand favorably for lending.
Risk analysis
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.
Litigation (Item 3)
6Points Food Services Ltd. v. Carl's Jr. Restaurants LLC, et al., No. 15-543370 (Sup. Ct. of Justice, Ontario). Canadian franchisee seeking declaration to rescind development and franchise agreements, alleging deficient franchise disclosures under Ontario's Arthur Wishart Act, breach of representations, contractual obligations, and fair dealing. Seeking CD $8,000,000 in damages. Defendants deny all liability and filed counterclaim for breach of agreements and anticipatory repudiation.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · KPMG LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- 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 26 / 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
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rights | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| 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 |
| Jury trial waiver | Yes |
| Governing law | Tennessee |
| Litigation count | 6 |
View Item 3 litigation summary
6Points Food Services Ltd. v. Carl's Jr. Restaurants LLC, et al., No. 15-543370 (Sup. Ct. of Justice, Ontario). Canadian franchisee seeking declaration to rescind development and franchise agreements, alleging deficient franchise disclosures under Ontario's Arthur Wishart Act, breach of representations, contractual obligations, and fair dealing. Seeking CD $8,000,000 in damages. Defendants deny all liability and filed counterclaim for breach of agreements and anticipatory repudiation.
Items 10, 11
Training & Operations
- Classroom training
- 30 hrs
- On-the-job training
- 392 hrs
- Training location
- On-site and off-site
- POS system
- PAR Brink or Xenial Xpient
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: PAR Brink or Xenial Xpient
Item 20 · call current owners
Franchisee Contacts
100 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Carl's Jr. · FDD (2024) PDF
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.
What is Carl's Jr.'s franchise failure rate?
Based on SBA 7(a) loan data, Carl's Jr. has a charge-off rate of 0.0% across 34 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
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 A-grade franchise with a risk score of 26 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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.
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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.