In the Hardees agreement, is HR's right to make decisions subject to limitation or review?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
HR and Developer intend that the exercise of HR's right or discretion will not be subject to limitation or review.
Whenever HR has expressly reserved in this Agreement a right and/or discretion to take or withhold an action, or to grant or decline to grant Developer a right to take or withhold an action, except as otherwise expressly and specifically provided in this Agreement, HR may make such decision or exercise its right and/or discretion on the basis of its judgment of what is in its best interests.
This also applies if HR is deemed to have a right and/or discretion.
HR's judgment of what is in the best interests of the Hardee's System, at the time its decision is made or its right or discretion is exercised, can be made without regard to whether: (1) other reasonable alternative decisions or actions, or even arguably preferable alternative decisions or actions, could have been made by HR; (2) HR's decision or the action taken promotes its financial or other individual interest; (3) HR's decision or the action taken applies differently to Developer and one or more other developers or franchisees or HR company-operated or affiliate-operated operations; or (4) HR's decision or the action taken is adverse to Developer's interests.
HR will have no liability to Developer for any such decision or action.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to the 2025 Hardees Franchise Disclosure Document, Hardees and the developer intend that the exercise of Hardees' right or discretion will not be subject to limitation or review. Hardees may make decisions or exercise its rights based on its judgment of what is in its best interests. This applies even if other reasonable or preferable alternatives exist, if the decision promotes Hardees' financial interests, if the decision applies differently to the developer compared to other developers or company-operated locations, or if the decision is adverse to the developer's interests.
Hardees will not be liable to the developer for any such decision or action. This indicates that Hardees retains significant control and decision-making power within the franchise relationship, with limited avenues for the franchisee to challenge those decisions.
This arrangement is not uncommon in franchising, where the franchisor typically sets standards and makes decisions to maintain brand consistency and protect the overall system. However, prospective Hardees franchisees should carefully consider the implications of this provision, as it could limit their ability to influence decisions that affect their individual business.