Where must the Development Principal maintain their primary residence in relation to the Hardees Development Territory?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
The Development 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. (This requirement does not apply if you were a publicly-held entity or a wholly-owned subsidiary of a publiclyheld entity as of the date of the first franchise-related agreement between you and us.) The Development Principal must be a member of the Continuity Group and have full control over the day-to-day development of the Franchised Restaurants. Unless you have named, and we have approved, a Multi-Unit Development Manager (discussed below), the Development Principal must: (1) devote full time and best efforts to the supervising development of the Franchised Restaurants; and (2) maintain his/her primary residence within a reasonable driving distance of the Development Territory, unless waived in writing by us. The Development Principal will be required to successfully complete our development training and any additional training required by us.
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, the Development Principal must maintain their primary residence within a reasonable driving distance of the Development Territory, unless Hardees waives this requirement in writing. The Development Principal is a qualified individual designated and approved by Hardees to oversee the development of franchised restaurants. This individual must also own at least a 10% equity ownership interest in the franchisee or its general partner (if the franchisee is a limited partnership), unless otherwise modified by Hardees or if the franchisee was a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity at the time of the initial franchise agreement.
The Development Principal is required to devote full time and best efforts to supervising the development of Hardees restaurants, unless a Multi-Unit Development Manager has been appointed and approved by Hardees. They must also be a member of the Continuity Group, which includes the Development Principal, the Operating Principal, all holders of a 10% or greater interest in the franchisee, and, in some cases, owners of entities holding a 10% or greater interest.
This residency requirement ensures that the Development Principal can effectively manage and oversee the development of new Hardees locations within their designated territory. The "reasonable driving distance" is not specifically defined in the FDD, leaving room for interpretation and potential negotiation with Hardees. Prospective franchisees should discuss this requirement with Hardees to understand what constitutes a reasonable distance in their specific Development Territory.