Besides operating other Hardees Restaurants franchised by HR or its affiliates, under what conditions can a Hardees franchisee engage in other business activities without conflicting with their obligations under the Franchise Agreement?

According to Hardees' 2025 Franchise Disclosure Document, a franchisee can engage in other business activities if they do not conflict with their obligations under the Franchise Agreement. Specifically, a Hardees franchisee can operate other restaurants that are either Hardees Restaurants or other restaurants franchised by HR or its affiliates. Additionally, a franchisee can operate other restaurants as disclosed to HR in Appendix A of the Franchise Agreement.

However, the Franchise Agreement stipulates that during the term of the agreement and for two years following its expiration, transfer, or termination, the franchisee cannot engage in any restaurant business that competes with Hardees. This includes businesses where sales of specific entrée items (hamburgers, chicken sandwiches, breakfast sandwiches, or other items designated by Hardees) are likely to account for 20% or more of the restaurant's sales during any part of the day, or that feature or promote these items in their advertising, or that operate in a quick-service format. This restriction applies without geographical limitation during the agreement and within a 2-mile radius of the Franchised Location or any existing Hardees Restaurant after the agreement ends.

This restriction does not apply to the franchisee's existing restaurant or foodservice operations, if any, which are identified in Appendix A, nor does it apply to other restaurants operated by the franchisee that are franchised by Hardees or its affiliates. Therefore, it is crucial for prospective franchisees to carefully review Appendix A and understand the restrictions on operating competing businesses, both during and after the franchise term, to avoid any potential conflicts with the Franchise Agreement.