Why might Hardees concentrate purchases with one or more suppliers?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
We may approve one or more suppliers or distributors for any products, equipment (including computer/cash register system as noted below), goods or materials, and we may approve a supplier or distributor only as to certain goods or materials. We may concentrate purchases with one or more suppliers to obtain lower prices and/or the best advertising support and/or services for any group of Hardee's Restaurants, or any other group of restaurants operated or franchised by HR or its affiliates.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 39–42)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees may concentrate purchases with one or more suppliers for specific reasons. This strategy allows Hardees to potentially secure lower prices for goods and services, which can benefit both the franchisor and franchisees through reduced operating costs. Additionally, concentrating purchases may enable Hardees to negotiate for the best advertising support, enhancing brand visibility and marketing efforts across the Hardees system. Furthermore, this approach can lead to improved services from suppliers, ensuring consistent quality and reliability in the supply chain.
For a prospective Hardees franchisee, this means that the availability and pricing of key supplies and ingredients could be more stable and potentially more favorable due to the bulk purchasing power of the franchisor. However, it also means that franchisees have limited or no flexibility in choosing suppliers independently, as they must adhere to the approved supplier list provided by Hardees. This restriction ensures brand consistency and quality control but may also limit a franchisee's ability to seek out potentially lower prices or alternative products on their own.
It is important for franchisees to understand that Hardees reserves the right to change master distributors and approve suppliers based on various criteria, including frequency of delivery, reporting capabilities, service standards, and sanitation standards. While franchisees are entitled to purchase products at prices and terms negotiated by Hardees, the franchisor can limit the number of suppliers who deliver products at those prices and terms. This system-wide approach aims to optimize costs and maintain quality standards across all Hardees restaurants, but it also centralizes control over the supply chain with the franchisor.