For what breaches of the Hardees Agreement are the Guarantors personally liable?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- **1.
Guarantee To Be Bound by Certain Obligations.** Guarantors hereby personally and unconditionally guarantee to HR and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement or at law or in equity, that each will be personally bound by the restrictions contained in Section 12 of the Agreement.
- **2.
Guarantee and Assumption of Developer's Obligations.** Guarantors hereby: (A) guarantee to HR and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement or at law or in equity, that Developer and any assignee of Developer's interest under the Agreement shall: (1) punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement and (2) punctually pay all other monies owed to HR and/or its affiliates; (B) agree to be personally bound by each and every provision in the Agreement, including, without limitation, the provisions of Sections 12 and 16; and (C) agree to be personally liable for the breach of each and every provision in the Agreement.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the Guarantors play a significant role in ensuring the Developer's (franchisee's) adherence to the franchise agreement. The Guarantors provide a personal and unconditional guarantee to Hardees, binding themselves to the restrictions outlined in Section 12 of the agreement, which likely covers aspects such as confidentiality, non-compete clauses, and protection of Hardees's proprietary information. This obligation extends for the entire term of the agreement and even after its termination, as specified by the agreement or by law.
Specifically, the Guarantors guarantee that the Developer will fulfill all obligations, agreements, and covenants detailed in the Hardees agreement, including the punctual payment of all monies owed to Hardees and its affiliates. They also agree to be personally bound by every provision in the agreement, particularly Sections 12 and 16, and accept personal liability for any breach of these provisions. This means that if the Developer fails to meet their financial or operational obligations, Hardees can pursue the Guarantors directly for recourse.
Furthermore, the document outlines that the Guarantors' liability is joint and several, meaning each guarantor is individually responsible for the entire obligation. Hardees is not obligated to first pursue remedies against the Developer or any other party before seeking fulfillment from the Guarantors. The Guarantors' liability remains unaffected by any amendments to the agreement or extensions of time granted to the Developer, ensuring the guarantee remains continuous and irrevocable as long as there are outstanding obligations from the Developer to Hardees. This comprehensive guarantee underscores the importance Hardees places on ensuring franchisee compliance and financial stability through the commitment of the Guarantors.