Can Hardees assign its option to purchase the assets of a Hardees franchise?

According to Hardees' 2025 Franchise Disclosure Document, Hardees has the unrestricted right to assign its option to purchase the assets of a franchise. This option becomes relevant upon the expiration or termination of the franchise agreement for any reason. Hardees can exercise this option by providing written notice to the franchisee within 60 days after the termination or expiration date, or the date the franchisee ceases operations, whichever is later.

Assets that Hardees may purchase include leasehold improvements, equipment, vehicles, furnishings, fixtures, signs, and inventory used in the franchised restaurant, as well as the real estate or lease for the franchised location. Hardees or its assignee is entitled to customary representations and warranties that the assets are free and clear regarding ownership, condition, title, liens, encumbrances, environmental and hazardous substances, and the validity of contracts.

The purchase price for these assets will be their fair market value at the time of purchase, accounting for depreciation and condition. This valuation does not include any factor for trademarks or goodwill. If Hardees and the franchisee cannot agree on the fair market value, it will be determined by two certified appraisers, one selected by each party. If the appraisals differ by more than 10%, a third appraiser will be selected, and the average of the appraisals will determine the purchase price. Hardees may then exercise its option to purchase the assets by notifying the franchisee in writing within 10 days after the purchase price is determined, with the closing to occur no later than 60 days after Hardees' purchase notice.

This clause ensures that Hardees retains control over the restaurant locations and assets, even after a franchise agreement ends. For a prospective franchisee, this means that upon termination or expiration of the franchise agreement, Hardees has the right to buy the assets of the restaurant, and can assign this right to another party. The franchisee needs to be aware of the conditions under which Hardees can exercise this option and how the purchase price will be determined, which can significantly impact their return on investment.