What control must the Operating Principal have over the day-to-day activities of the Hardees Franchised Restaurant?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
The Operating Principal must own at least a 10% equity ownership interest in you, or in your general partner if you are a limited partnership, unless modified by us in our sole discretion, and be a person acceptable to both us and you. (This requirement does not apply if you were a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity as of the date of the first franchise-related agreement between you and us.) The Operating Principal must be a member of the Continuity Group and have full control over the day-to-day activities of the Franchised Restaurant and those other restaurants (that are franchised by us or our affiliates) operated by you in the same geographic market as the Franchised Restaurant, including control over the standards of operation and financial performance. Unless you have named, and we have approved, a Multi-Unit Manager (discussed below), the Operating Principal must: (1) devote full time and best efforts to the supervision and conduct of the Franchised Restaurant and those other restaurants (that are franchised by us or our affiliates) operated by you in the same geographic market as the Franchised Restaurant; and (2) maintain his/her primary residence within a reasonable driving distance of the Franchised Restaurant, unless waived in writing by us. The Operating Principal will be required to successfully complete the FMTP and any additional training required by us. If you operate restaurants in multiple markets that are franchised by us or our affiliates, an individual meeting the above qualifications will serve as the Operating Principal in at least one market.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 62–63)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, while a franchisee is not obligated to participate personally in the direct operation of the franchised restaurant, they must designate an Operating Principal who has full control over the day-to-day activities. This control extends not only to the specific Hardees restaurant but also to any other restaurants franchised by Hardees or its affiliates that the franchisee operates within the same geographic market. This includes maintaining control over the standards of operation and the financial performance of these restaurants.
The Operating Principal must also own at least a 10% equity ownership interest in the franchisee's business, or in the general partner if the franchisee is a limited partnership, unless Hardees modifies this requirement at their discretion. The Operating Principal must be a member of the Continuity Group. Unless a Multi-Unit Manager has been approved, the Operating Principal is required to devote their full time and best efforts to supervising the Hardees restaurant and other affiliated restaurants in the same market. They must also maintain their primary residence within a reasonable driving distance of the Hardees location, unless Hardees provides a written waiver.
Furthermore, the Operating Principal is required to successfully complete the Franchise Management Training Program (FMTP) and any additional training that Hardees requires. If a franchisee operates Hardees restaurants in multiple markets, an individual meeting these qualifications must serve as the Operating Principal in at least one of those markets. This ensures that Hardees maintains a consistent standard of operation and financial performance across all franchised locations, with a qualified individual directly responsible for overseeing these aspects.