How does the Hardees Development Fee (Item 5) incentivize franchisees to develop restaurants in specific geographic areas or markets that the franchisor is targeting for expansion?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
For Franchisees who develop 3 or more Hardee's restaurants or the conversion of an existing restaurant to a Hardee's restaurant as part of the 2025 HR Travel Center Development Incentive Program, we will reduce or waive the initial franchisee as set forth in Item 5 and reduce the royalty fee and APO fee as set forth in Item 6.
If you qualify for the 2025 HR Development Incentive Program, simultaneously with your execution of the qualifying Franchise Agreement, you will sign a 2025 HR Travel Center Development Incentive Program Addendum to the Franchise Agreement (Exhibit K), which memorializes your right to receive the development incentives described above for the applicable Franchised Restaurant(s). If you sign the HR 2025 Development Incentive Program Addendum to Franchise Agreement, you will not be entitled, with respect to the applicable Franchised Restaurant(s) covered by the 2025 HR Travel Center Development Incentive Program, to any other incentives that have been or may be offered by us.
If the requirements for the 2025 HR Travel Center Development Incentive Program are not satisfied, then the Travel Center Location or Gas and Convenience Location may be eligible for the 2025 Development Incentive Program provided the following requirements are satisfied: (i) franchisee signs a Franchise Agreement for the development of a newly-constructed Hardee's Restaurant by no later than May 24, 2026 or franchisee signs a Franchise Agreement for the development of a newly constructed Hardee's Restaurant pursuant to the terms of a Development Agreement dated no later than May 24, 2026, (ii) franchisee must open the newly-constructed Hardee's Restaurant(s) by the date(s) outlined in the corresponding Development Agreement or Franchise Agreement, (iii) franchisee may not be in default of its obligations under its existing franchise agreements or related agreements with HR or its affiliates, (iv)
franchisee must be approved for growth by HR and its affiliates, (vi) franchisee must satisfy HR's thencurrent financial and operational requirements for new restaurant development, and (v) franchisee and the Hardee's Restaurant(s) otherwise meet the requirements of the 2025 Development Incentive Program.
For Franchisees who are eligible for the 2025 Development Incentive Program, we will reduce the initial franchise fee as set forth in Item 5 and reduce the royalty and APO fee as set forth in Item 6 for the first three years of the franchise term.
If you qualify for the 2025 Development Incentive Program, simultaneously with your execution of the qualifying Franchise Agreement, you will sign a 2025 DIP Addendum to the Franchise Agreement (Exhibit L), which memorializes your right to receive the development incentives described above for the applicable Franchised Restaurant(s). If you sign the 2025 DIP Addendum to Franchise Agreement, you will not be entitled, with respect to the applicable Franchised Restaurant(s) covered by the 2025 Development Incentive Program, to any other incentives that have been or may be offered by us.
What This Means (2025 FDD)
According to the 2025 Hardees Franchise Disclosure Document, Hardees uses development incentive programs to encourage franchisees to develop restaurants in specific locations, particularly Travel Center Locations or Gas and Convenience Locations. These locations are defined as facilities near interstates or limited access highways, focusing on services for the trucking industry or non-commercial fuel service and convenience items.
To incentivize development in these areas, Hardees offers two main programs: the 2025 HR Travel Center Development Incentive Program and the 2025 Development Incentive Program. Franchisees who qualify for either program may receive a reduction or waiver of the initial franchise fee (as detailed in Item 5) and reduced royalty and APO fees (as detailed in Item 6) for the first three years of the franchise term.
The 2025 HR Travel Center Development Incentive Program specifically targets the development of Hardees restaurants at Travel Center Locations or Gas and Convenience Locations near major highways. To qualify, franchisees must develop at least three newly-constructed Hardee's restaurants under a Development Agreement dated no later than May 24, 2026. The 2025 Development Incentive Program also requires franchisees to sign a Franchise Agreement or Development Agreement by May 24, 2026, and meet certain financial and operational requirements. By reducing the initial franchise fee and ongoing royalty and APO fees, Hardees aims to lower the financial burden on franchisees and encourage them to invest in these strategically important locations. Franchisees should note that if they sign either incentive program addendum, they will not be entitled to any other incentives offered by Hardees.