May Hardees and its affiliates receive promotional allowances and volume discounts 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.
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 may receive promotional allowances and volume discounts from approved suppliers based on sales to franchisees. Hardees and its affiliates can use these amounts without restriction for any purposes they deem appropriate. This arrangement is common in franchising, where franchisors often negotiate with suppliers on behalf of the entire system.
This practice allows Hardees to potentially increase its revenue streams. It also provides Hardees with the ability to support the franchise system through supply chain, quality assurance, distribution, and logistics services. These services include negotiating with suppliers and distributors, designating distributors, and managing distribution logistics.
Hardees also reserves the right to recover costs related to performing 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. This means that while franchisees may benefit from negotiated prices and services, they may also incur additional costs through these fees. Franchisees should consider these potential costs when evaluating the overall financial implications of the franchise.
Additionally, the FDD mentions that during major promotions, suppliers may sell items to Hardees at a discount. Hardees has the discretion to either pass these savings directly to the franchisees or contribute any amounts collected in excess of the discount to HNAF. Certain soft drink suppliers also offer rebates to both Hardees and its franchisees based on volume purchases. During the fiscal year ended January 27, 2025, KDM, Dr. Pepper, and CDM made contributions to HNAF totaling $59,823, $61,562, and $50,000 respectively, which were used primarily to offset advertising production costs.