What constitutes a material, non-curable breach of the Hardees Development Agreement related to the development plan?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
ome or all of the Proprietary Marks in the Development Territory through any other method or channel of distribution; and (F) sell and distribute products identified by some or all of the Proprietary Marks in the Development Territory to restaurants other than Hardee's Restaurants, provided those restaurants are not licensed to use the Proprietary Marks in connection with their retail sales.
Except as reserved in the preceding paragraph, HR will not, during the Development Term, operate or license others to operate Hardee's Restaurants in the Development Territory, provided Developer is in compliance with the terms of this Agreement and any other agreements with HR or its affiliates and is current on all obligations due HR and its affiliates. This Section 2 does not prohibit HR or its affiliates from: (1) operating and licensing others to operate, during the Development Term, Hardee's Restaurants at any location outside of the Development Territory; (2) operating and licensing others to operate, after this Agreement terminates or expires, Hardee's Restaurants at any location, including in the Development
Territory; and (3) operating and licensing others to operate at any location, during or after the Development Term, any type of restaurant other than a Hardee's Restaurant.
The restrictions contained in this Section 2 apply onl
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, a material, non-curable breach of the Development Agreement occurs if a developer fails to comply with the development plan or any material aspect of it. The development plan, if prepared, outlines specific markets or trade areas for restaurant development, the number and type of restaurants, and the timeframes for development in each area.
Strict adherence to the Development Schedule is crucial. Any failure to open a franchised restaurant by the specified Opening Date in Appendix B also constitutes a material, non-curable breach. Similarly, failing to obtain site acceptance by the date outlined in the Development Schedule leads to immediate termination rights for Hardees.
This means a prospective Hardees developer must carefully consider the feasibility of the proposed development schedule and plan before signing the Development Agreement. Failure to meet these development obligations gives Hardees the right to immediately terminate the agreement, highlighting the importance of thorough planning and execution.
Time is explicitly stated to be "of the essence" in the agreement, reinforcing the critical nature of meeting deadlines. The initial franchise fee for each restaurant developed under the agreement is $25,000, so failing to meet the development schedule would not only terminate the agreement but also forfeit any initial franchise fees paid for restaurants not yet opened.