What actions or inactions by a Hardees franchisee can lead to termination of the franchise agreement by Hardees?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
ining requirements; be in good standing; not be in default under any agreement between you and HR and its affiliates; remodel; demonstrate right to remain in possession of the Franchised Location; and pay a renewal fee. You also must sign our then-current form of Franchise Agreement, the terms of which likely will differ from your original Franchise Agreement, including, without limitation, those relating to royalty fees and advertising obligations. | | Provision | Section in Franchise Agreement | Summary | |--------------------------------------------------|-------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | d. Termination by you | Not Applicable | | | e. Termination by us without | Not Applicable | | | cause | | | | f. Termination by us with cause | Section 21 | We may terminate upon default, which includes, but is not limited to, remaining in default beyond any applicable cure period under any agreement with us or our affiliates, including any Development Agreement. | | g. "Cause" defined-curable defaults | Section 21.B. | You have 10 days to cure monetary defaults. You have 30 days to cure defaults other than those discussed in paragraph h. | | h. "Cause" defined-non-curable defaults | Sections 21.A., 21.B.(3) & 21.C. | Non-curable defaults include: closure of the Franchised Restaurant for more than 5 days; insolvency; bankruptcy; execution levied on your business or property; foreclosure; material breach of covenants; transfer without our prior written consent; material misrepresentation; falsification of reports; failure to open the Franchised Restaurant within 60 days after opening is authorized; imminent danger to public health or safety; loss of possession of the Franchised Location; felony conviction; breach of any representation or warranty;
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 64–69)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees can terminate the Franchise Agreement if the franchisee defaults. This includes remaining in default beyond any applicable cure period under any agreement with Hardees or its affiliates, including any Development Agreement. For monetary defaults, a Hardees franchisee has 10 days to cure the default. For other defaults, the franchisee has 30 days to cure, except for non-curable defaults.
Non-curable defaults that can lead to termination include: closure of the Franchised Restaurant for more than 5 days; insolvency; bankruptcy; execution levied on your business or property; foreclosure; material breach of covenants; transfer without Hardees' prior written consent; material misrepresentation; falsification of reports; failure to open the Franchised Restaurant within 60 days after opening is authorized; imminent danger to public health or safety; loss of possession of the Franchised Location; felony conviction; breach of any representation or warranty; default beyond cure period under other agreements with HR or its affiliates, under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or with any vendor or supplier to the Franchised Restaurant; default after receipt of 2 or more notices of default within previous 12 months; and receipt of second consecutive failing score on an inspection.
These termination conditions are typical in franchise agreements, as franchisors need to protect their brand and ensure consistent operation across all locations. Prospective Hardees franchisees should carefully review Section 21 of the Franchise Agreement to fully understand what constitutes a default and the potential consequences. Understanding these conditions is crucial for maintaining a good relationship with Hardees and avoiding potential termination of the franchise agreement.