What constitutes a waiver by a Hardees franchisee of their option to remain a franchisee beyond the initial term?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) At the expiration of the Initial Term, Franchisee shall have an option to remain a franchisee at the Franchised Location for a Renewal Term of 10 years or, at Franchisee's option, 5 years. Franchisee must give HR written notice of whether or not it intends to exercise its renewal option and the length of the proposed Renewal Term not less than 12 months, nor more than 24 months, before the expiration of the Initial Term. Notwithstanding the foregoing, if Franchisee subleases the Franchised Location from HR, Franchisee must give HR the notice described in the preceding sentence not less than 6 months, nor more than 12 months, before notice of renewal is required to be provided to the landlord under the master lease. Failure by Franchisee to timely provide HR the required notice constitutes a waiver by Franchisee of its option to remain a franchisee beyond the expiration of the Initial Term.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, a franchisee's failure to provide timely written notice to HR (Hardee's Restaurants LLC) regarding their intent to exercise the renewal option constitutes a waiver of their option to remain a franchisee beyond the initial term. The franchisee must notify HR whether or not they intend to renew and the length of the proposed renewal term, which can be either 10 years or 5 years. This notice must be given not less than 12 months, nor more than 24 months before the initial term expires.
However, if the Hardees franchisee subleases the franchised location from HR, the notification timeline is different. In this case, the franchisee must provide HR with the renewal notice not less than 6 months, nor more than 12 months, before notice of renewal is required to be provided to the landlord under the master lease.
This requirement ensures Hardees has adequate time to plan for the future of the location, whether it continues under the existing franchisee or transitions to a new operator. Failing to meet these deadlines results in the franchisee losing their renewal option, regardless of their performance or investment in the business. This strict timeline underscores the importance of franchisees carefully tracking deadlines and communicating proactively with Hardees to preserve their renewal rights.