What actions can Hardees mandate regarding a franchisee's computer system as its data limits are reached or as technology/software develops?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that computer systems are designed to accommodate a finite amount of data and terminals, and that, as these limits are reached, or as technology or software is developed in the future, HR may, in its sole discretion, mandate that Franchisee: (A) add memory, ports and other accessories or peripheral equipment or additional, new or substitute software to the original computer system purchased by Franchisee; and (B) replace or upgrade the entire computer system with a larger system capable of assuming and discharging the computer-related tasks and functions specified by HR. Franchisee also acknowledges that computer designs and functions change periodically and that HR may desire to make substantial modifications to its computer specifications or to require installation of entirely different systems during the term of this Agreement or upon renewal of this Agreement.
To ensure full operational efficiency and communication capability between HR's computers and those of all Hardee's Restaurants, Franchisee agrees, at its expense, to keep its computer system in good maintenance and repair and to make additions, changes, modifications, substitutions and replacements to its computer hardware, software, telephone and power lines and other computer-related facilities as directed by HR, and on the dates and within the times specified by HR in its sole discretion. Upon termination or expiration of this Agreement, all computer software, disks, tapes and other magnetic storage media shall be returned to HR in good operating condition, excepting normal wear and tear.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, Hardees retains significant control over a franchisee's computer systems. As a Hardees franchisee's computer system reaches its data limits, or as technology or software evolves, Hardees has the authority to mandate specific actions. These actions include requiring the franchisee to add memory, ports, accessories, peripheral equipment, or new software to their existing computer system. Hardees can also require the franchisee to replace or upgrade the entire computer system with a larger one that meets Hardees' specifications. All of these changes and upgrades are at the franchisee's expense.
Hardees also specifies that franchisees must maintain their computer systems in good condition and repair, making any additions, changes, modifications, substitutions, and replacements to hardware, software, telephone and power lines, and other related facilities as directed by Hardees. These directives will be issued at Hardees' sole discretion, with specific dates and times for compliance. Upon termination or expiration of the franchise agreement, all computer software, disks, tapes, and other magnetic storage media must be returned to Hardees in good operating condition, with allowances for normal wear and tear.
These stipulations ensure that all Hardees restaurants maintain operational efficiency and communication capability with Hardees' central computers. The franchisee bears the financial responsibility for keeping their technology current and compliant with Hardees' evolving standards. This level of control is typical in franchising, where maintaining brand consistency and data security is crucial. However, franchisees should be aware of the potential costs associated with these technology upgrades and replacements, as they are responsible for these expenses.