Carl's Jr. Franchise
Cost, fees, owner earnings, closure rate and litigation for a Carl's Jr. franchise — pulled from the franchisor's own public FDD (2025), not its sales material.
Disclosure honesty
Carl's Jr. discloses earnings (Item 19) — but the grade is how honestly. We graded it D.
What their own earnings claim actually says
Discloses only average/median revenue ($1.59M avg) for 56 travel center/gas-convenience locations, excluding 950 freestanding units (majority of system). No expenses, margins, or profit data provided. Severe cherry-picking by location type.
What a Carl's Jr. franchise actually costs to run
| Fee | Disclosed | Where it comes from |
|---|---|---|
| Initial franchise fee | $25,000 | Item 5 — paid up front, before you open |
| Royalty | 4% of gross sales | Item 6 — charged on revenue, not profit |
| Advertising fund | 6% of gross sales | Item 6 — brand marketing, spent at the franchisor's discretion |
| Total recurring fees | 10% of gross sales | Before rent, labor, food or debt service |
| Total initial investment | $688,000 – $1,143,000 | Item 7 — franchisor's own low/high estimate |
Royalty 4-5%; APO up to 7% (currently 6%); DIP incentives reduce fees years 1-3 for qualifying locations.
Royalty and ad-fund percentages are charged on gross sales — an owner pays them whether or not the location is profitable.
Carl's Jr. system size and owner turnover
| Total outlets | 1,032 |
| Ceased operations | 34 |
| Terminated by franchisor | 0 |
| Transferred to new owners | 12 |
| Closure rate | 3.3% of outlets |
34 ceased operations in FY2025; franchised units dropped 32 net; dual-concept restaurants collapsed by 155 units.
From Item 20 of the FDD 2025. Terminations and ceased operations are the franchisor's own count of owners who stopped — the number the sales pitch leaves out.
Is Carl's Jr. worth it? — how it compares to 164 similar franchises
| Ongoing fees | 10% of sales | steeper than 86% of quick service restaurants franchises |
| Startup cost | from $688,000 | pricier than 69% of peers |
| Disclosure honesty | Grade D | less honest than most of the category |
| Closure rate | 3.3% of outlets | worse than 65% of peers |
| Disclosed lawsuits | 9 | more litigious than 93% of peers |
Benchmarked against every quick service restaurants franchise we've graded from public FDDs — the context the franchisor's pitch never gives you.
Owner take-home for a Carl's Jr.
The franchisor's framing: Discloses only average/median revenue ($1.59M avg) for 56 travel center/gas-convenience lo… We reconstruct what an owner actually keeps, from their own FDD.
- Reconstructed owner P&L — net take-home after royalty, ad fund, rent, labor & debt
- Break-even timeline + cash-on-cash ROI
- Full fee stack + required-purchase markups
- Decoded real failure / closure rate
- How it ranks vs comparable franchises
- Validation-call playbook — the exact questions to ask
See a full sample report → · 30-day guarantee
Carl's Jr. franchise — frequently asked
- How much does a Carl's Jr. franchise cost?
- The FDD lists a total initial investment of about $688,000–$1,143,000, including a $25,000 initial franchise fee.
- How much do Carl's Jr. franchise owners make?
- Discloses only average/median revenue ($1.59M avg) for 56 travel center/gas-convenience locations, excluding 950 freestanding units (majority of system). No expenses, margins, or profit data provided. Severe cherry-picking by location type. We grade this disclosure D for honesty.
- What are the Carl's Jr. franchise fees?
- Carl's Jr.'s FDD discloses a $25,000 initial franchise fee, a 4% royalty on gross sales, a 6% advertising-fund contribution, for roughly 10% of gross sales in recurring fees before rent, labor, or debt service. Royalty 4-5%; APO up to 7% (currently 6%); DIP incentives reduce fees years 1-3 for qualifying locations.
- What is the Carl's Jr. franchise profit margin?
- Carl's Jr. does not publish a franchisee net-profit margin — almost no franchisor does. What Item 19 actually shows: Discloses only average/median revenue ($1.59M avg) for 56 travel center/gas-convenience locations, excluding 950 freestanding units (majority of system). No expenses, margins, or profit data provided. Severe cherry-picking by location type. Recurring fees alone take about 10% of gross sales, before rent, labor, food or debt service. Margin has to be reconstructed from the disclosure, not read off it.
- What is the Carl's Jr. franchise failure rate?
- 34 ceased operations in FY2025; franchised units dropped 32 net; dual-concept restaurants collapsed by 155 units.
- How many Carl's Jr. locations are there?
- Carl's Jr.'s FDD reports 1,032 total outlets, with 34 that ceased operations in the most recent reporting year and 12 transferred to new owners. Item 20 is where system health shows up before the marketing does.
- Does Carl's Jr. have complaints or lawsuits?
- Carl's Jr. discloses 9 legal matters in Item 3 of its FDD. Item 3 covers the franchisor's litigation history, which is the closest thing to a public record of how it treats franchisees — read the case descriptions, not just the count.
- Is a Carl's Jr. franchise worth it?
- It depends on the numbers, not the pitch. Carl's Jr. scores D on disclosure honesty, carries about 10% of sales in ongoing fees, and discloses 9 legal matters. Get the real owner take-home before you sign.
Own a Carl's Jr.? Add your real numbers (anonymous)
We publish only aggregated benchmarks — never your name. Contribute and we'll show you how your numbers compare.
Compare Carl's Jr. to similar franchises
See all franchises ranked by disclosure honesty →
Source: MN CARDS 35314-202601-02 (Clean FDD 2025). FranchiseValidate is independent and not affiliated with Carl's Jr. or its franchisor. Figures are extracted from the franchisor's own public disclosure document; verify against the current FDD before any decision.