Besides paying interest, what other recourse does Hardees have if a franchisee makes a late payment?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
reement or under applicable law.
G. Partial Payments
No payment by Franchisee or acceptance by HR of any monies under this Agreement for a lesser amount than due shall be treated as anything other than a partial payment on account. Franchisee's payment of a lesser amount than due with an endorsement, statement or accompanying letter to the effect that payment of the lesser amount constitutes full payment shall be given no effect and HR may accept the partial payment without prejudice to any rights or remedies it may have against Franchisee. Acceptance of payments by HR other than as set forth in this Agreement shall not constitute a waiver of HR's right to demand payment in accordance with the requirements of this Agreement or a waiver by HR of any other remedies or rights available to it pursuant to this Agreement or under applicable law. Notwithstanding any designation by Franchisee, HR shall have sole discretion to apply any payments by Franchisee to any of its past due indebtedness for royalty fees, advertising contributions, purchases from HR or its affiliates, interest or any other indebtedness. HR has the right to accept payment from any other entity as payment by Franchisee. Acceptance of that payment by HR will not result in that other entity being substituted for Franchisee.
H. Collection Costs and Expenses
Franchisee agrees to pay to HR on demand any and all costs and expenses incurred by HR in enforcing the terms of this Agreement, including, without limitation, collecting any monies owed by Franchisee to HR.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, if a franchisee fails to make payments on time, Hardees has several options beyond charging interest. Hardees can pursue various avenues to recover monies owed, including engaging a collection agency or attorneys. The franchisee is responsible for covering all associated costs and expenses Hardees incurs while trying to collect the debt. These expenses encompass collection agency fees, attorney fees (including those for in-house counsel), court costs, expert witness fees, discovery costs, and attorney fees for appeals, along with interest charges on these amounts.
Hardees retains the right to apply any payments received from the franchisee to any outstanding debts, such as royalty fees, advertising contributions, purchases from Hardees or its affiliates, or interest, regardless of any designation made by the franchisee. Furthermore, Hardees can accept payments from another entity on behalf of the franchisee without that entity becoming a substitute for the franchisee.
Additionally, if the franchisee fails to maintain sufficient funds in their account for electronic funds transfers, it constitutes a default of the agreement. The franchisee is not entitled to withhold any payments, such as royalty fees, advertising contributions, or interest charges, due to alleged non-performance by Hardees or for any other reason. These measures ensure Hardees can protect its financial interests and enforce the franchise agreement terms effectively.