Considering the Hardees litigation (Item 3), what are the potential risks and liabilities for a franchisee who is considering expanding their menu offerings or introducing new products?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
You must use the Franchised Restaurant solely for the operation of the Hardee's Restaurant and must maintain sufficient inventories, adequately staff each shift with qualified employees and continuously operate the Franchised Restaurant as we specify in the OPM or otherwise in writing.
You must meet and maintain the highest applicable public health standard and rating. You must adhere to the terms outlined in the Red Audit Policy for third-party food safety audits. You must operate the Franchised Restaurant in strict conformity with the methods, standards and specifications as we prescribe in the OPM or otherwise in writing.
You must offer for sale and sell at the Franchised Restaurant all and only those products and services as are expressly authorized by us in the OPM or otherwise in writing. We have the right to change the menu items, ingredients, products, materials, supplies and paper goods or the standards and specifications of each and there are no limits on our ability to do so. You must promptly comply with the
new requirements. We also may restrict sales of menu items to certain time periods during the day. We do not limit the customers to whom you may sell goods or services. You must offer to customers online ordering and delivery services pursuant to online ordering/delivery programs that we may from time to time establish with approved vendors and comply with our specifications regarding same.
What This Means (2025 FDD)
Based on the 2025 Hardees Franchise Disclosure Document, franchisees face restrictions on what they can sell. Hardees franchisees must operate their restaurants strictly as Hardees Restaurants, maintaining sufficient inventory and staff, and adhering to public health standards and third-party food safety audits. They must follow the methods, standards, and specifications prescribed by Hardees in its Operation Procedures Manual (OPM) or other written directives.
A significant risk for Hardees franchisees is the limited control over the menu. Franchisees are required to offer for sale only those products and services expressly authorized by Hardees. Hardees retains the right to change menu items, ingredients, products, materials, supplies, and paper goods without any limitations. Franchisees must promptly comply with these changes, which could involve additional costs for new equipment, training, or inventory. Hardees also may restrict sales of menu items to certain time periods.
While the FDD excerpts provided do not contain specific details about litigation related to menu changes, the broad control Hardees maintains over the menu and restaurant operations, as detailed in Item 16 and other sections, suggests that franchisees who deviate from approved offerings could face penalties or legal action. Prospective franchisees should inquire about the process for suggesting or requesting new menu items and the potential liabilities for non-compliance with Hardees's prescribed menu and operational standards. Understanding these restrictions is crucial for franchisees to avoid potential conflicts and maintain compliance with the franchise agreement.