factual

What actions can Hardees require of a franchisee if Hardees reasonably determines that the franchisee is unable to meet its obligations?

Hardees Franchise · 2025 FDD

Answer from 2025 FDD Document

If HR, in its sole discretion, believes that Franchisee has failed adequately to address or resolve any customer complaints, HR may, without Franchisee's consent, resolve any complaints and charge Franchisee an amount sufficient to cover HR's reasonable costs and expenses in resolving the customer complaints, which amount Franchisee shall pay HR immediately on demand.

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.

To determine whether Franchisee and the Franchised Restaurant are in compliance with this Agreement and with all specifications, quality standards operating procedures and brand standards prescribed by HR for the operation of Hardee's Restaurants, HR or its designees shall have the right at any reasonable time and without prior notice to Franchisee to: (1) inspect the Franchised Location; (2) observe, photograph and videotape the operations of the Franchised Restaurant for such consecutive or intermittent periods as HR deems necessary; (3) remove samples of any food and beverage product, material or other products for testing and analysis (without paying for the samples); (4) interview personnel of the Franchised Restaurant; (5) interview customers of the Franchised Restaurant; and (6) inspect and copy any books, records and documents, including any electronic records, relating to the operation of the Franchised Restaurant or, upon the request of HR or its designee, require Franchisee to send copies thereof to HR or its designee. Franchisee agrees to cooperate fully with HR or its designee in connection with any such inspections, observations, videotaping, product removal and interviews. Franchisee shall take all necessary steps to immediately correct any deficiencies detected during these inspections, including, without limitation, ceasing further sale of unauthorized menu items, correcting any critical food safety issues, correcting any identified deficiencies that adversely impact guest safety or the ability to operate the restaurant in conformance with OPM procedures or brand standards, and ceasing further use of any equipment, advertising materials or supplies that do not conform with the standards and requirements promulgated by HR from time to time. If HR deems such deficiencies to create an imminent health hazard to Franchisee's customers, it may direct Franchisee to temporarily close the Franchised Restaurant until all hazards are corrected to HR's satisfaction pursuant to HR's Closure Policy, as amended from time to time.

Source: Item 22 — Contracts (FDD page 85)

What This Means (2025 FDD)

Based on the 2025 Hardees Franchise Disclosure Document, if Hardees determines that a franchisee is not adequately addressing customer complaints, Hardees may intervene and resolve the complaints themselves. Hardees can then charge the franchisee an amount sufficient to cover Hardees' reasonable costs and expenses in resolving the customer complaints. The franchisee is then obligated to pay Hardees this amount immediately upon demand.

Additionally, to ensure operational efficiency and communication, Hardees requires franchisees to maintain their computer systems and make necessary additions, changes, modifications, substitutions, and replacements to their computer hardware, software, telephone and power lines, and other computer-related facilities as directed by Hardees. These changes must be made on the dates and within the times specified by Hardees.

Hardees also has the right to inspect the franchised restaurant at any reasonable time and without prior notice to determine compliance with the agreement and standards. During these inspections, Hardees can inspect the location, observe operations, remove samples for testing, interview personnel and customers, and inspect records. Franchisees must cooperate with these inspections and immediately correct any deficiencies detected. If deficiencies create an imminent health hazard, Hardees may direct the franchisee to temporarily close the restaurant until the hazards are corrected to Hardees' satisfaction.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.