Verified — real FDD extraction
Not found in the SBA Franchise Directory — SBA financing may be unavailable; verify with your lender
CARL'S JR
Other · independent · est. —
Carl's Jr. is a fast-food hamburger chain known for large charbroiled burgers, including the Famous Star and Western Bacon Cheeseburger, plus fries and shakes. It runs quick-service restaurants with drive-thru. A franchisee operates one or more locations under the brand.
CARL'S JR net unit count declined -6.9% from 2022–2026 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & steady
Distress
A real track record with an unremarkable region of the ledger: neither the growth nor the exits stand out, for better or worse. The main concern in the record: the system is shrinking.
Exit rate · latest year
4.6%
fiscal 2026, per Item 20
Cost to open
$1.5M–$3.3M
Item 7 total investment range
SBA loan defaults
No loan record
no SBA 7(a)/504 loans found for this brand
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2022–2026
Survival record
FDD Item 20 · outlet status by year
In fiscal 2026, 45 of 982 franchised outlets left the system — a 4.6% annualized exit rate. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Outlets at start | 1,079 | 1,066 | 1,069 | 1,063 | 1,032 |
| Opened | 5 | 6 | 9 | 7 | 5 |
| Transfers | 39 | 94 | 33 | 12 | 5 |
| Terminations | 0 | 0 | 1 | 0 | 2 |
| Non-renewals | 6 | 0 | 1 | 4 | 0 |
| Reacquired by franchisor | 0 | 0 | 1 | 1 | 0 |
| Ceased — other reasons | 12 | 4 | 12 | 34 | 43 |
| Outlets at end | 1,066 | 1,069 | 1,063 | 1,032 | 992 |
| Net change | -13 | +3 | -6 | -31 | -40 |
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $25K franchise fee (Item 5) and a total investment of $1.5M–$3.3M (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$1.5M–$3.3M
all-in investment range
Franchise fee (Item 5)
$25K
upfront, one-time
Royalty (Item 6)
4%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$40K
4% of sales, before profit
Over a 10-yr term
$400K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for CARL'S JR with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 16 wage cases against operators of this system, recovering $26K in back wages for 129 workers, including 6 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
16
Back wages owed
$26K
Employees affected
129
Since 2020
1
6 of these cases involved child-labor violations, covering 18 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual CARL'S JR franchisees — separately owned businesses operating under the brand name — not CARL'S JR itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2023.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
Major Carl's Jr. Franchisee Closing 10 and Selling 49 Locations amid Chapter 11 Bankruptcy Filing
news:People.com · 1mo ago
Why is Carl's Jr. closing? Franchisee to sell nearly 50 SoCal locations
news:Ventura County Star · 1mo ago
news:Fast Company · 2mo ago
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing CARL'S JR's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →CARL'S JR franchise questions, answered from the filings
What percentage of CARL'S JR franchises closed last year?
In CARL'S JR's latest FDD Item 20 (fiscal 2026), 45 of 982 franchised outlets left the system — an annualized exit rate of 4.6%. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a CARL'S JR franchise cost?
Per CARL'S JR's 2026 FDD, buying in requires an initial franchise fee of $25K (Item 5) and a total initial investment of $1.5M–$3.3M (Item 7).
What royalty does CARL'S JR charge?
CARL'S JR charges an ongoing royalty of 4.0% of gross sales, per Item 6 of its 2026 FDD.
Does CARL'S JR disclose earnings (Item 19)?
Yes — CARL'S JR makes a financial performance representation in Item 19 of its 2026 FDD, reporting a median unit volume of $1.3M. Read it closely: franchisors choose which units and which metrics to include.