For Hardees, what must a Developer who is a business entity furnish HR with regarding ownership interests?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
If Developer is a business entity, Developer must furnish HR with a list of all holders of a direct or indirect ownership interest in Developer and their respective percentage interests. As of the date of this Agreement, all interests in Developer are owned as set forth in attached Appendix C. Developer shall comply with Section 10 prior to any change in ownership interests and shall update Appendix C as changes occur in order to ensure the information contained in Appendix C is true, accurate and complete at all times.
The requirements of this Section 8.C. shall apply only to Developer's Continuity Group (defined in Section 8.D.) if, as of the date of the first franchise-related agreement between Developer and HR or one of its affiliates, Developer was a publicly-held entity (i.e., an entity that has a class of securities traded on a recognized securities exchange or quoted on the inter-dealer quotation sheets known as the "pink sheets"). If Developer becomes a publicly-held entity after that date, it shall thereafter be required to update Appendix C only with respect to changes in ownership interests of members of the Continuity Group.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, if a Developer is a business entity, they must provide HR with a list of all individuals or entities holding a direct or indirect ownership interest in the Developer, along with their respective percentage interests. This information is initially documented in Appendix C of the agreement.
Hardees requires the Developer to comply with Section 10 of the agreement before making any changes to ownership interests. Furthermore, the Developer is obligated to update Appendix C whenever changes occur in ownership to ensure that the information remains accurate and complete at all times.
However, these requirements apply only to the Developer's Continuity Group if the Developer was a publicly-held entity on the date of the first franchise-related agreement. If the Developer becomes a publicly-held entity after that date, it only needs to update Appendix C with respect to changes in ownership interests of members of the Continuity Group. The Continuity Group includes the Development Principal, all holders of 10% or more of the ownership interests, all 10% owners of the Developer's general partner (if the Developer is a limited partnership), and all 10% owners of a business entity that owns a controlling interest in the Developer.