Can Hardees and its affiliates receive fees from approved Hardees suppliers?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
h commissaries and distribution facilities owned and operated by us or an affiliate that we will designate as an approved supplier.
One or more of our officers may own nominal interests in certain of our approved suppliers which are publicly traded companies or through investment funds.
We and our affiliates may receive fees, payments, commissions, field-of-use license royalties or other consideration from approved suppliers based on sales to franchisees, from promotional allowances and volume discounts. We and our affiliates may use all amounts received from approved suppliers, distributors or third parties, whether or not based on your and/or other franchisees' actual or prospective dealings with them, without restriction for any purposes we or our affiliates deem appropriate. Finally, we and our affiliates provide supply chain, quality assurance, distribution and logistics services for the franchise system. These services include negotiating with suppliers and distributors who will sell and
distribute goods to our franchisees, designating one or more distributors to service our franchisees, and managing distribution logistics. As a result, we and our affiliates reserve the right to recover our costs related to performing these services by collecting a per-case distribution fee for all cases sold by an approved supplier to our franchisees and from other logistics-related programs.
We may charge non-approved suppliers reasonable testing and/or inspection fees.
If you propose to purchase any goods or materials from a supplier that we have not previously approved, you must notify us and submit to us or a designated independent testing laboratory, at your expense, the information, specifications and samples as we reasonably request. A fee not to exceed the reasonable cost of the inspection and the actual cost of the test may be charged by us or by an independent testing laboratory designated by us and must be paid for by you.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 39–42)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees and its affiliates can receive fees from approved suppliers. These fees may include payments, commissions, field-of-use license royalties, or other forms of consideration based on sales to franchisees, promotional allowances, and volume discounts. Hardees and its affiliates have unrestricted use of these funds, regardless of whether they are based on a franchisee's dealings with the suppliers.
Hardees and its affiliates also provide supply chain, quality assurance, distribution, and logistics services for the Hardees franchise system. These services include negotiating with suppliers and distributors, designating distributors for franchisees, and managing distribution logistics. As a result, Hardees and its affiliates can recover their costs for these services by collecting a per-case distribution fee for all cases sold by an approved supplier to Hardees franchisees and from other logistics-related programs.
During the fiscal year ended January 27, 2025, certain suppliers made contributions to HNAF (presumably Hardees National Advertising Fund): KDM contributed $59,823; Dr. Pepper contributed $61,562; and CDM contributed $50,000. These funds were primarily used to offset the cost of point-of-purchase and other advertising production costs. Additionally, Hardees and its affiliates' revenue from all sales and leases to Hardee's franchisees was approximately $33 million, representing about 4.9% of the total revenue of the Securitization Entities, which was approximately $671.4 million. In some cases, Hardees simply passes through the franchisee payments to the designated vendor, supplier, or landlord.