Does the Hardees Development Rights Agreement give the Developer the right to operate Franchised Restaurants or use the Hardee's System?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement is not a license or a franchise agreement. It does not give Developer the right to operate Franchised Restaurants or use the Hardee's System. In addition, this Agreement does not give Developer any right to license others to operate Franchised Restaurants or use the Hardee's System. This Agreement only gives Developer the opportunity to enter into Franchise Agreements for the operation of Franchised Restaurants at locations in the Development Territory accepted by HR. Each Franchised Restaurant developed pursuant to this Agreement shall be established and operated only in strict accordance with a separate Franchise Agreement.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the Development Rights Agreement does not grant the developer the right to operate franchised restaurants or use the Hardee's system. The agreement solely provides the developer with the opportunity to enter into franchise agreements for operating Hardee's restaurants within a specific development territory, provided that Hardees accepts the proposed locations. Each restaurant must be established and operated strictly under a separate Franchise Agreement.
This distinction is crucial for potential developers because the Development Rights Agreement focuses on securing the rights to develop franchises in a specific area, not on the actual operation of those franchises. Developers must understand that they will need to sign separate franchise agreements for each Hardees restaurant they plan to open. This also means that the obligations and responsibilities for operating each Hardees location will be defined in those individual franchise agreements, not the Development Rights Agreement.
Hardees also retains significant control, as they must approve each specific location within the development territory. Furthermore, the FDD states that Hardees may have different agreements with other developers and franchisees, which could contain different provisions. Therefore, developers should carefully review the terms of their specific Development Rights Agreement and any subsequent Franchise Agreements to fully understand their rights and obligations.