Can Hardees approve a supplier for only certain goods or materials?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
We may approve one or more suppliers or distributors for any products, equipment (including computer/cash register system as noted below), goods or materials, and we may approve a supplier or distributor only as to certain goods or materials. We may concentrate purchases with one or more suppliers to obtain lower prices and/or the best advertising support and/or services for any group of Hardee's Restaurants, or any other group of restaurants operated or franchised by HR or its affiliates. Although you are not required to lease a location from us or an affiliate, we must consent to your selection of the site for your Hardee's Restaurant. If you lease the Restaurant premises from a third party landlord, you must sign the Franchise Lease Addendum attached as Appendix G to the Franchise Agreement.
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 has the authority to approve suppliers for specific goods or materials. This means Hardees isn't obligated to approve a supplier for all products; they can limit approval to only certain items. This allows Hardees to maintain tighter control over the quality and consistency of specific ingredients or supplies used in its restaurants.
For a prospective Hardees franchisee, this means you may need to source different products from different approved suppliers. This could potentially increase complexity in your supply chain management. It also means that if you want to use a specific supplier for a product that isn't already approved, you'll need to go through Hardees's approval process, which involves providing information, specifications, and samples, potentially at your own expense. A deposit of $1,500 is required before inspection of a new supplier's facility can occur.
Hardees can also concentrate purchases with specific suppliers to get better pricing, advertising support, or services for Hardee's restaurants. This benefits franchisees by potentially lowering costs or improving marketing efforts. However, approximately 90% of purchases or leases of fixtures, furnishings, equipment, décor, signs, food items, ingredients, supplies and other products must be purchased according to Hardees' specifications or from approved suppliers. Hardees estimates these items represent approximately 65% of controllable purchases, excluding labor and general administrative costs.
Hardees may receive fees, payments, commissions, or royalties from approved suppliers based on sales to franchisees, promotional allowances, and volume discounts. Hardees can use these amounts for any purpose they deem appropriate. This revenue model is common in franchising, where the franchisor benefits from the collective purchasing power of its franchisees. One or more of Hardees' officers may own nominal interests in certain of their approved suppliers which are publicly traded companies or through investment funds.