How does the Hardees Development Fee (Item 5) relate to the franchisor's commitment to providing ongoing operational support and guidance (Item 11) to franchisees as they manage their restaurants?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5. Provide periodic advice and consultation to you in connection with the operation of the Franchised Restaurant as we deem appropriate or necessary. We will provide to you our knowledge and expertise regarding the Hardee's System and pertinent new developments, techniques and improvements in the areas of restaurant design, management, systems and tools, food and beverage preparation, sales promotion, service concepts, overall restaurant operations, financial metrics and other areas. We may provide these services through visits by our representatives to the Franchised Restaurant or your offices, the distribution of printed or filmed material or electronic information, meetings or seminars, telephone communications, email communications and other communications. (Franchise Agreement, § 12.C.)
- 6. Conduct inspections of the Franchised Restaurant and evaluations of the products sold and services rendered as we deem appropriate or necessary. (Franchise Agreement, § 12.D.)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the Development Fee in Item 5 is not directly discussed in relation to the ongoing operational support and guidance detailed in Item 11. However, Item 11 outlines the support Hardees provides to franchisees both before opening and during the operation of the franchise. This support includes site selection assistance, access to the Operations Procedures Manual (OPM) and Development Guide, and the Franchise Management Training Program (FMTP) for up to 8 individuals.
During the pre-opening phase, Hardees offers consultation and advice on construction, renovation, building layout, and employee selection. They also provide prototypical plans and specifications for the restaurant. During the operation of the franchise, Hardees commits to providing periodic advice and consultation, sharing expertise on restaurant design, management, food preparation, sales promotion, and overall operations. This support is delivered through various means, including visits, printed materials, meetings, and electronic communications.
Hardees also conducts inspections and evaluations of the restaurant's products and services. Franchisees are obligated to participate in advertising and promotion, contributing a percentage of gross sales (4.25% as of the document's date) to the Hardee's National Advertising Fund (HNAF). While the FDD does not explicitly link the Development Fee to these support services, the comprehensive nature of the support described in Item 11 suggests that Hardees is committed to helping franchisees succeed, independent of the initial fees paid.
It is important to note that the level of support provided may vary, and Hardees retains discretion in determining the appropriateness and necessity of the assistance offered. Additionally, franchisees may incur costs for certain support services, such as opening training support, depending on the level of support needed. Prospective franchisees should clarify the specific support services they can expect and any associated costs during their due diligence process.