Who bears the cost of inspection and testing when a Hardees franchisee proposes a new supplier?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee proposes to purchase any goods or materials (that Franchisee is not required to purchase from HR, an affiliate of HR or a designated supplier) from a supplier that HR has not previously approved, Franchisee shall submit to HR a written request for such approval, or shall request the supplier to do so itself. HR has the right to require, as a condition of its approval, that its representatives be permitted to inspect the supplier's facilities, and that such information, specifications and samples as HR reasonably designates be delivered to HR and/or to an independent, certified laboratory designated by HR for testing prior to granting approval. A charge not to exceed the reasonable cost of the inspection and the actual cost of the test shall be paid by Franchisee. HR reserves the right, at its option, to re-inspect the facilities and products of any such approved supplier and to revoke its approval upon the suppliers' failure to continue to meet any of the foregoing criteria.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, if a franchisee proposes a new supplier for goods or materials not required to be purchased from Hardees or its approved suppliers, the franchisee is responsible for covering the costs associated with the supplier's approval process. Specifically, Hardees has the right to require inspections of the supplier's facilities and testing of samples by an independent, certified laboratory.
The franchisee must pay a charge that does not exceed the reasonable cost of the inspection and the actual cost of the testing. This means that while Hardees can mandate these inspections and tests, the costs charged to the franchisee must be reasonable and directly related to the expenses incurred during the approval process.
Hardees also retains the right to re-inspect the facilities and products of any approved supplier and can revoke approval if the supplier fails to continue meeting the established criteria. This ongoing oversight ensures that all suppliers, even those initially approved, maintain the required standards. The franchisee's responsibility for the initial inspection and testing costs underscores the importance of carefully vetting potential suppliers before proposing them to Hardees for approval.