What constitutes a waiver of the Hardees franchisee's option to renew the franchise 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' 2025 Franchise Disclosure Document, a franchisee's failure to provide timely written notice to HR (Hardees 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 in writing whether they intend to renew and the length of the renewal term (either 5 or 10 years). This notice must be given no less than 12 months and no more than 24 months before the initial term expires. However, if the franchisee subleases the location from HR, the notification period is shortened to no less than 6 months and no more than 12 months before the notice of renewal is required to be provided to the landlord under the master lease.
This requirement is significant because it sets a strict deadline for franchisees to decide about renewing their franchise agreement. Missing this deadline means the franchisee loses the right to renew, potentially losing their business location and the Hardees franchise. The different notification timelines based on the lease agreement (direct lease vs. sublease from HR) add complexity, requiring franchisees to be aware of their specific lease situation.
It is important for prospective Hardees franchisees to understand these renewal terms and set reminders to ensure timely notification. Franchisees should also clarify with Hardees the specific notification deadlines based on their individual lease arrangements to avoid inadvertently waiving their renewal option. Paying close attention to these deadlines and maintaining open communication with Hardees is crucial for a smooth franchise renewal process.