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Carl’s Jr. Franchises Make $1.4M Sales (+ 2022 Costs & Profits)

With over 700 franchise-owned restaurants in the US alone, Carl’s Jr. is one of the most popular fast food franchises in the US, and for good reasons. Yet, opening a Carl’s Jr. franchise is not for everyone unfortunately.

Indeed, you would need to invest on average $1,860,000 to open a new Carl’s Jr. store, which is definitely on the higher end for similar restaurant franchises. Are the profits worth the cost?

That’s something we are looking into in this article. Using the information in the latest Franchise Disclosure Document, we will see how much you can make with this business and how profitable a Carl’s Jr. franchise really is. Finally, we’ll see whether this is a good investment or not. Let’s find out!

Carl’s Jr. franchises: revenues, costs & profits

Franchise fee$25,000
Royalty fee4.0%
Marketing fee6.0%
Investment (mid-point)$1,860,000
Average annual sales$1,419,516
Investment to sales ratio0.8x
Investment payback*8.7 years (mediocre)
Minimum net worth$1,000,000
Minimum liquid capital$500,000
* using 15% net profit margin

🔎 How does Carl’s Jr. compare vs. other franchises? Check the ranking

What is Carl’s Jr.?

Carl’s Jr. is an American fast-food restaurant chain best known for its iconic charbroiled burgers. It has locations in North and South America, Asia, Oceania, Europe, and Africa.

The chain store was founded in 1941 by Carl Karcher and his wife Margaret in Los Angeles, California.

It serves hamburgers, chicken, French fries, sandwiches, desserts, salads, nachos, milkshakes, burritos, coffee, and breakfast wraps.

Its franchising journey began in 1984 and is franchised by the parent company, CKE Restaurant Holding Inc. Currently, Carl’s Jr. has more than 1,672 units in the US and 28 countries worldwide.

Carl’s Jr. franchises: pros and cons

When starting a Carl’s Jr. franchise, first find out its advantages and disadvantages.

Pros

  • Recognized brand: Carl’s Jr. is not a new name for burger enthusiasts. It is a brand known for its signature menu of breakfast, lunch, and dinner products. It is a fast-growing franchise and enjoys an international presence. New franchisees can enjoy a huge flow of customers, and the franchise offers a great opportunity for growth and profitability.
  • World-class support: To help new franchisees establish and run their restaurants successfully, Carl’s Jr. offers substantial training and support. The franchisor offers site selection, restaurant design, equipment ordering, and construction. They also offer franchise business consultations, operations, equipment, procedure optimization, marketing, and advertising support. All this is meant to give franchisees training and business ideas to succeed.
  • Proven business model: The brand has been in business for over 80 years. They have penetrated new markets, including international ones, and continued to wow their customers with quality, made-to-taste foods. Their business strategy has been successful, and they can pass on to new franchisees a strong business culture that is known to work and has propelled them to success and profitability.
  • Marketing support: Another benefit of operating a Carl’s Jr. franchise is its solid marketing support. Carl’s Jr. offers new franchisees assistance with their strategic advertising and local store marketing.
  • Growth potential: if you’re an investor looking for a business with a lot of growth potential, then Carl’s Jr. is a good opportunity. It has stores in both the United States and around the world and is still rapidly expanding. With plans to expand in existing and new markets, new franchisees will find it easy to market and grow their businesses with less effort and advertising costs.

Cons

  • No franchise financing: The franchise does not offer any direct or indirect financing to its franchisees. It also does not guarantee any lease, grant, or note concerning its franchisees’ financing.
  • No exclusive territory protection: Carl’s Jr. does not offer exclusive territory protection to its franchisees. The franchisor may grant franchises to other restaurants in the location occupied by its franchisees. Franchisees also face competition from businesses operated and controlled by the parent company.
  • No absentee ownership: Carl’s Jr. is not a perfect match for those looking for a passive investment. It requires owners to actively work in the restaurant business and be involved in its day-to-day operations.

How much does a Carl’s Jr. franchise cost?

You must invest around $1,860,000 to open a Carl’s Jr. franchised restaurant.

The investment amount can vary depending on your situation, as it is an average. The investment amount ranges between $1,389,000 and $2,331,000.

As for the investment, what are you paying for, you may ask? Well  you are paying for a number of  startup expenses. To be precise, you would pay:

  • Fees to Carl’s Jr.: the initial franchise fee and the “Opening Training Support Team Fee” that essentially are training expenses for you and your team
  • Build-Out Costs: building, site improvements, soft costs, equipment, signage, point of sale system
  • Preliminary Operating Expenses: initial training, pre-opening costs, additional funds for 3 months as working capital
LowHigh
Fees to Carl’s Jr.$55,000$75,000
Build-out costs$1,146,670$1,923,000
Preliminary operating expenses$188,000$333,000
Total investment $1,389,670$2,331,000
Source: FDD 2022

How much sales can a Carl’s Jr. franchise make?

On average, a Carl’s Jr. franchise makes $1,419,516 in sales per year (+10% revenue growth vs. 2021)

This sales number is the median annual gross sales of the 723  franchised restaurants operating in 2022.

The FDD also provides the median revenue of the 723 franchise-owned restaurants by quartile, as shown below. Whilst the top quartile had median sales of $2,223,000 million, the lowest 25% (181 restaurants) had median sales of $944,000 instead.

Source: 2022 FDD

How profitable is a Carl’s Jr. franchise?

Carl’s Jr. franchise makes $396,045 in profits per year on average. That means you may expect a 28% adjusted EBITDA margin

This margin does not indicate net profit, thus you may need to deduct taxes, debt interest expenses, and other costs from this amount.

The 28% adjusted EBITDA margin is on the higher end compared to similar franchises as per our intelligence (~25-27% industry average). 

Note that to calculate this number we had to use the industry average for rent (8% of sales). 

Also, as Carl’s Jr. doesn’t provide financial information on the costs of franchised restaurants, we used company-owned restaurants’ data for COGS (25.1%) and labor costs (29.0%) instead.

Profit-and-lossAmount ($)As % of sales
Sales$1,419,516
COGS$(356,299)25.1%
Labor$(411,660)29.0%
Rent$(113,561)8.0%*
Royalty + marketing fees$(141,952)10.0%
Adjusted EBITDA$396,045~28%
* industry average

Is a Carl’s Jr. franchise a good investment?

Carl’s Jr. franchises are profitable as we just saw. But are they worth the high price tag of $1,860,000?

To find out, we need to calculate the payback period: the time it takes for a franchisee to recoup her/his original investment, using net profits. Unfortunately net profits aren’t provided in the FDD, as it’s mostly the case.

If we were to assume a net profit margin of 15%, it would take on average 8.7 years for you to reimburse your initial investment (the $1,860,000). That’s not a great number unfortunately, so from a financial standpoint, Carl’s Jr. doesn’t seem like the best investment.

Yet, keep in mind this is an estimate, and also an average of the 723 franchise-owned restaurants. Your restaurant may be more profitable and successful. To visualize your franchise’s profits, breakeven, payback period and more, download our business plan template below.

Download the Carl’s Jr. business plan and get your franchise funded

Including a 5-year financial plan built with the latest Franchise Disclosure Document numbers

How does it compare vs. other franchises?

FranchiseInvestment ($)Sales ($)S/I RatioPayback (years)Min. net worth ($)Min. liquid capital ($)
Chick-Fil-Ahttps://sharpsheets.io/blog/chick-fil-a-franchise-costs-profits/Chicken1,363,5104,227,4173.12.2--
Dunkin' Donutshttps://sharpsheets.io/blog/dunkin-donuts-franchise-costs-profits/Donuts779,0001,056,5211.44.9500,000250,000
Domino'shttps://sharpsheets.io/blog/dominos-franchise-profits-costs/Pizza398,7251,286,4283.23.9250,00075,000
Krispy Kremehttps://sharpsheets.io/blog/krispy-kreme-franchise-costs-profits/Donuts824,0003,400,0004.11.62,000,000300,000
Little Caesarshttps://sharpsheets.io/blog/little-caesars-franchise-costs-profits/Pizza1,022,850798,1130.88.5350,000150,000
Wingstophttps://sharpsheets.io/blog/wingstop-franchise-costs-profits/Chicken631,6951,460,4592.32.91,200,000600,000
Steak 'n Shakehttps://sharpsheets.io/blog/steak-n-shake-franchise-costs-profits/Burger, Milshakes815,6261,346,3321.74.01,500,000500,000
Crumbl Cookieshttps://sharpsheets.io/blog/crumbl-cookie-franchise-cost-profits/Sweets507,2241,582,0903.12.1300,000150,000
Taco Bellhttps://sharpsheets.io/blog/taco-bell-franchise-costs-profits/Mexican462,4131,650,0003.61.91,500,000750,000
Popeyeshttps://sharpsheets.io/blog/popeyes-franchise-costs-profits/Chicken1,095,7831,444,6171.35.11,000,000500,000
Smoothie Kinghttps://sharpsheets.io/blog/smoothie-king-franchise-costs-profits/Smoothie688,108573,2690.88.0300,000100,000
Jersey Mike'shttps://sharpsheets.io/blog/jersey-mikes-franchise-costs-profits/Sandwich574,3231,220,5862.14.7300,000100,000
Nothing Bundt Cakeshttps://sharpsheets.io/blog/nothing-bundt-cakes-franchise-costs-profits/Sweets538,6501,307,2802.42.7600,000150,000
Jimmy John'shttps://sharpsheets.io/blog/jimmy-johns-franchise-costs-profits/Sandwich513,650874,8451.73.9300,00080,000
Texas Roadhousehttps://sharpsheets.io/blog/texas-roadhouse-franchise-costs-profits/Steakhouse4,209,5002,955,5340.79.5n.a.200,000
Kung Fu Teahttps://sharpsheets.io/blog/kung-fu-tea-franchise-costs-profits/Bubble tea250,125353,2371.44.7n.a.25,000
Wendy’shttps://sharpsheets.io/blog/wendys-franchise-cost-profits/Burger1,374,8331,791,2311.35.11,000,000500,000
Burger Kinghttps://sharpsheets.io/blog/burger-king-franchise-costs-profits/Burger1,242,9501,215,9701.06.81,500,000500,000
Sonic Drive-Inhttps://sharpsheets.io/blog/sonic-drive-in-franchise-costs-profits/Burger1,467,0831,617,0001.16.01,000,000500,000
Panera Breadhttps://sharpsheets.io/blog/panera-bread-franchise-costs-profits/Sandwich2,290,5002,599,4321.15.97,500,0003,000,000
Pizza Huthttps://sharpsheets.io/blog/pizza-hut-franchise-costs-profits/Pizza935,575906,9111.06.9700,000350,000
KFChttps://sharpsheets.io/blog/kfc-franchise-costs-profits/Chicken1,802,0501,567,4740.97.71,500,000750,000
Arby’shttps://sharpsheets.io/blog/arbys-franchise-costs-profits/Sandwich1,184,9751,126,2631.07.01,000,000500,000
Dairy Queenhttps://sharpsheets.io/blog/dairy-queen-franchise-costs-profits/Ice Cream1,404,2201,143,1800.88.2750,000400,000
Jack in the Boxhttps://sharpsheets.io/blog/jack-in-the-box-franchise-costs-profits/Burger2,195,8001,755,5030.812.51,000,000250,000
Papa John’shttps://sharpsheets.io/blog/papa-johns-franchise-costs-profits/Pizza353,6951,101,1273.12.1750,000250,000
Zaxby’shttps://sharpsheets.io/blog/zaxbys-franchise-costs-profits/Chicken534,7502,229,1874.22.41,000,000500,000
Hardee’shttps://sharpsheets.io/blog/hardees-franchise-costs-profits/Burger1,759,0001,147,9750.710.21,000,000300,000
Culver’shttps://sharpsheets.io/blog/culvers-franchise-costs-profits/Burger4,044,5003,051,7620.88.82,000,000350,000
Five Guyshttps://sharpsheets.io/blog/five-guys-franchise-costs-profits/Burger511,2251,203,3662.42.8500,000250,000
Carl’s Jr.https://sharpsheets.io/blog/carls-jr-franchise-costs-profits/Burger1,860,3351,419,5160.88.71,000,000500,000
Baskin-Robbinshttps://sharpsheets.io/blog/baskin-robbins-franchise-costs-profits/Ice Cream465,100316,8150.79.8250,000125,000
IHOPhttps://sharpsheets.io/blog/ihop-franchise-costs-profits/Pancakes2,058,3021,553,3110.88.81,500,000500,000
Applebee’shttps://sharpsheets.io/blog/applebees-franchise-costs-profits/Casual American5,137,9662,356,9650.514.51,000,000500,000
Denny'shttps://sharpsheets.io/blog/dennys-franchise-costs-profits/Casual American3,785,4591,639,5490.415.41,000,000500,000
Papa Murphy'shttps://sharpsheets.io/blog/papa-murphys-franchise-costs-profits/Pizza433,174580,4411.35.0275,000125,000
Auntie Anne'shttps://sharpsheets.io/blog/auntie-annes-franchise-costs-profits/Pretzels229,692343,1351.55.6300,000100,000
Firehouse Subshttps://sharpsheets.io/blog/firehouse-subs-franchise-costs-profits/Sandwich613,186888,3561.44.6350,000100,000
Tropical Smoothie Cafehttps://sharpsheets.io/blog/tropical-smoothie-cafe-franchise-costs-profits/Smoothie430,500961,9692.23.0350,000125,000
Marco’s Pizzahttps://sharpsheets.io/blog/marcos-pizza-franchises-costs-profits/Pizza437,625895,5232.03.3400,000100,000
Cinnabonhttps://sharpsheets.io/blog/cinnabon-franchises-costs-profits/Sweets276,062394,8971.45.8300,000120,000
Cold Stone Creameryhttps://sharpsheets.io/blog/cold-stone-creamery-franchise-costs-profits/Ice Cream310,956417,5881.35.0250,000100,000
Jambahttps://sharpsheets.io/blog/jamba-franchise-costs-profits/Smoothie414,562597,0281.47.7300,000100,000
Church’s Chickenhttps://sharpsheets.io/blog/churchs-texas-chicken-fees-sales-costs/Chicken1,195,1471,395,0881.25.71,000,000300,000
Moe’s Southwest Grillhttps://sharpsheets.io/blog/moes-southwest-grill-franchises-costs-profits/Mexican792,3701,013,3611.35.21,000,000100,000
Tim Hortonshttps://sharpsheets.io/blog/tim-hortons-franchises-costs-profits/Coffee1,242,7501,188,2401.07.0500,000100,000
Checkers & Rally'shttps://sharpsheets.io/blog/checkers-franchises-profits-sales-costs/Burger837,8471,039,7731.25.4750,000250,000
Charleys Philly Steakshttps://sharpsheets.io/blog/charleys-philly-steaks-costs-profits/Sandwich509,806786,2331.54.3500,000100,000
Buffalo Wild Wingshttps://sharpsheets.io/blog/buffalo-wild-wings-costs-profits/Chicken3,546,9002,534,1480.79.31,500,000750,000
Rita's Icehttps://sharpsheets.io/blog/ritas-ice-franchise-costs-profits/Ice Cream215,839248,3401.25.8300,000100,000
A&W Restaurantshttps://sharpsheets.io/blog/aw-restaurants-franchises-costs-profits/Burger786,750851,2121.16.2350,000150,000
Hungry Howie’s Pizzahttps://sharpsheets.io/blog/hungry-howies-pizza-franchise-costs-profits/Pizza419,682806,8991.93.5750,000200,000
Bojangleshttps://sharpsheets.io/blog/bojangles-franchise-costs-profits/Chicken1,658,0001,801,0571.16.11,000,000500,000
McAlister’s Delihttps://sharpsheets.io/blog/mcalister-deli-franchise-costs-profits/Sandwich1,424,9631,865,8611.35.11,000,000500,000
Round Table Pizzahttps://sharpsheets.io/blog/round-table-pizza-franchise-costs-profits/Pizza783,2501,037,8161.35.0500,000200,000
Qdoba Mexican Eatshttps://sharpsheets.io/blog/qdoba-mexican-eats-franchise-costs-profits/Mexican659,250972,9621.54.5
Freddy’shttps://sharpsheets.io/blog/freddys-franchise-costs-profits/Burger1,453,0401,792,9291.25.41,000,000400,000
Taco John’shttps://sharpsheets.io/blog/taco-johns-franchise-costs-profits/Mexican1,119,0001,124,9801.06.61,000,000400,000
Scooter’s Coffeehttps://sharpsheets.io/blog/scooters-coffee-franchise-costs-profits/Coffee1,143,250797,1010.79.6500,000200,000
Einstein Bros. Bagelshttps://sharpsheets.io/blog/einstein-bros-bagels-franchise-costs-profits/Sandwich750,075885,0111.25.71,000,000536,500
Great American Cookieshttps://sharpsheets.io/blog/great-american-cookies-franchise-costs-profits/Sweets385,275452,7711.25.7250,000100,000
Wienerschnitzelhttps://sharpsheets.io/blog/wienerschnitzel-franchise-costs-profits/Hot dogs873,300880,9801.06.6600,000250,000
Blaze Pizzahttps://sharpsheets.io/blog/blaze-pizza-franchise-costs-profits/Pizza865,4501,096,4321.37.9500,000300,000
Wetzel's Pretzelshttps://sharpsheets.io/blog/wetzels-pretzels-franchise-costs-profits/Pretzels377,571748,8572.03.4300,00050,000
Pizza Ranchhttps://sharpsheets.io/blog/pizza-ranch-franchise-costs-profits/Pizza3,268,3001,174,0880.418.61,000,000297,000
Del Tacohttps://sharpsheets.io/blog/del-taco-franchise-costs-profits/Mexican1,406,8501,345,3411.07.02,000,000500,000
Schlotzsky’shttps://sharpsheets.io/blog/schlotzskys-franchises-costs-profits/Healthy, Salads1,102,9331,053,3330.322.21,000,000300,000
Captain D’shttps://sharpsheets.io/blog/captain-ds-franchise-profits-costs/Seafood982,7781,067,8160.419.01,000,000350,000
Biggby Coffeehttps://sharpsheets.io/blog/biggby-coffee-franchise-profits-costs/Coffee310,575648,3520.320.0300,000100,000
Which Wichhttps://sharpsheets.io/blog/which-wich-franchises-profits-costs/Sandwich330,375281,8860.322.2500,000150,000
Marble Slab Creameryhttps://sharpsheets.io/blog/marble-slab-franchises-costs-profits/Ice Cream407,360251,0520.416.7250,000100,000
Mountain Mike's Pizzahttps://sharpsheets.io/blog/mountain-mikes-franchise-profits-costs/Pizza410,900865,7130.320.0300,000100,000
Huddle Househttps://sharpsheets.io/blog/huddle-house-franchise-cost-profits/Diner988,743712,4280.513.3600,000300,000
L&L Hawaiian Barbecuehttps://sharpsheets.io/blog/ll-hawaiian-barbecue-franchises-costs-profits/BBQ334,350612,9210.333.3500,000150,000
Chicken Salad Chickhttps://sharpsheets.io/blog/chicken-salad-chick-franchises-costs-profits/Healthy, Salads651,0001,202,0200.320.0750,000250,000
Golden Chickhttps://sharpsheets.io/blog/golden-chick-franchises-costs-profits/Chicken362,975917,6092.52.62,000,000425,000
Perkinshttps://sharpsheets.io/blog/perkins-franchise-costs-profits/Diner1,922,7281,729,2460.97.41,500,000500,000
Waba Grillhttps://sharpsheets.io/blog/waba-grill-franchises-costs-profits/Teryaki454,000466,5361.06.51,000,000250,000
Bruster’s Ice Creamhttps://sharpsheets.io/blog/brusters-franchises-profits-costs/Ice Cream663,925466,6960.79.5375,000150,000