Does Hardees consider itself the primary beneficiary of any franchise entity that might be a Variable Interest Entity (VIE)?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not maintain ownership interests in our franchisees, and none of our assets serve as collateral for the creditors of our franchisees. Under the terms of their franchise agreements, franchise entities hold the power to direct the activities that most significantly impact their economic performance. As a result, we do not consider ourselves the primary beneficiary of any franchise entity that might be a variable interest entity.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees does not consider itself the primary beneficiary of any franchise entity that might be a Variable Interest Entity (VIE). The document states that Hardees does not maintain ownership interests in its franchisees, and none of Hardees's assets serve as collateral for the creditors of its franchisees.
Under the terms of the franchise agreements, franchise entities, not Hardees, hold the power to direct the activities that most significantly impact their economic performance. This means that each franchisee has control over their own business operations and financial outcomes.
This arrangement is typical in franchising, where franchisees operate as independent business owners. Hardees's stance reflects the standard franchise model, where the franchisee bears the primary responsibility and risk for their individual business's performance. This also means that Hardees's financial statements do not include the assets, liabilities, or earnings of its franchisees, maintaining a clear separation between the franchisor's and franchisees' financial positions.