Carl's Jr. Franchise Cost, Revenue & Review 2026
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]. SBA 7(a) loans show a 0.0% charge-off rate across 34 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $1.5M – $3.2M
- 98th pct Service Resta…
- Avg gross sales
- $1.4M
- 24th pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 1,063
- 93rd pct Service Resta…
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · 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 A (Strongest tier), verdict score 76/100 (higher is better). SBA loan charge-off rate of 0.0% across 34 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- 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.
- Ultimate parent
- CKE Inc.
- 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 254% 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%
- percentage · 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 16% above the quick-service restaurants norm.
Source: FDD 2024 · Item 19
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
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
FDD-reported earnings vs. model
The FDD reports $372K as EBITDAR9. Our model estimates $168K SLEBITDA from the same revenue using category-average cost assumptions. These numbers differ because EBITDAR9 deducts different expense categories than our model.
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. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real 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?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
7%
Below the 30–60% attractive-franchise band
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%.
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
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
- revenue
- Sample size
- 905 outlets
- vs category median 20 · large
- Range (low → high)
- $417K→$3.5M
- 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 782 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 average of 7.9%.
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 averages
How Carl's Jr. Compares
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
- 14
- 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
3-year detail · Item 20
- Opened (3yr)
- 9
- Closed (3yr)
- 12
- Terminated (3yr)
- 1
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 33
- Reacquired (3yr)
- 1
- Franchisor bought back
- 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.
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
- Typical loan rate
- 5.9%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- brand beats franchise avg ↓
- 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.
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.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower lender-observed risk.
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.
Litigation (Item 3)
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.
Largest disclosed settlement: $5,500,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · KPMG LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ 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 76 / 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
- 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
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 | none |
| 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
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 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?
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 verdict score of 76 out of 100 (higher is better), 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.
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.