After the Hardees Development Agreement terminates, is the developer allowed to operate a business that gives the public the impression that they are connected with Hardees, except for restaurants already franchised?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- H. Developer shall not, except with respect to a restaurant franchised by HR or its affiliates which is then open and operating pursuant to an effective franchise agreement or a restaurant franchised by HR or its affiliates for which there is an effective commitment agreement: (1) operate or do business under any name or in any manner that might tend to give the public the impression that Developer is connected in any way with HR or its affiliates or has any right to use the Hardee's System; (2) make, use or avail itself of any of the materials or information furnished or disclosed by HR or its affiliates under this Agreement or disclose or reveal any such materials or information or any portion thereof to anyone else; or (3) assist anyone not licensed by HR or its affiliates to construct or equip a foodservice outlet substantially similar to a Hardee's Restaurant.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, after the Development Agreement terminates, the developer is restricted from operating a business that could give the impression of being connected with Hardees. However, this restriction does not apply to restaurants franchised by Hardees or its affiliates that are open and operating under an effective franchise agreement, or those with an effective commitment agreement. This means that while a former developer cannot create a new business that mimics a Hardees, they can continue to operate existing franchised Hardees restaurants.
This provision protects Hardees' brand identity and prevents confusion among customers. It ensures that only authorized franchisees operate under the Hardees name and system. The restriction aims to maintain the integrity of the Hardees brand and prevent unauthorized use of its trademarks and operational methods.
For a prospective franchisee, this clause highlights the importance of understanding the terms of the Development Agreement and the restrictions that apply post-termination. It clarifies that while existing franchised locations can continue to operate, no new ventures can create the impression of affiliation with Hardees without explicit authorization. This ensures a clear separation between the former developer's activities and the Hardees franchise system, safeguarding the brand's reputation and customer perception.
It is important for potential developers to carefully review Section 14.H of the Development Agreement to fully understand the scope of these post-termination obligations and how they might impact future business ventures. This understanding is crucial for making informed decisions about entering into a Development Agreement with Hardees.