What documents are executed by the Hardees franchisee and proposed transferee if HR consents to the transfer?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
t and is not in default beyond the applicable cure period with any vendor or supplier to the Franchised Restaurant.
- (5) Franchisee or the proposed transferee, as determined by HR, must complete all remodel, renovations, re-image, maintenance and facility upgrades to modernize and conform the Franchised Restaurant to the image of the System for new franchised restaurants.
- (6) Franchisee, all individuals who executed this Agreement and all guarantors of Franchisee's obligations must execute a general release and a covenant not to sue, in a form satisfactory to HR, of any and all claims against HR and its affiliates and their respective past and present officers, directors, managers, shareholders, members, agents and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and claims arising out of, or relating to, this Agreement, any other agreements between Franchisee and HR or its affiliates and Franchisee's operation of the Franchised Restaurant and all other restaurants operated by Franchisee that are franchised by HR or its affiliates.
- (6) Unless waived by HR in its sole discretion, the transferee and those employees hired by the transferee to fill certain designated positions shall complete the training provided in Sections 11.A.-B.
- (7) The transferee and each of the transferee's affiliates that have entered into a development or franchise agreement with HR or its affiliates must, as of the date of the request for HR's consent to the Transfer, be in compliance with all obligations to HR or its affiliates under those agreements.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, if Hardees consents to a transfer of ownership, both the franchisee (transferor) and the proposed new franchisee (transferee) must execute specific documents to finalize the transfer. First, they must execute an assignment agreement, formally transferring the rights and obligations of the franchise agreement to the new franchisee. Hardees also has the option to require that the parties sign amendments to the existing franchise agreement or sign Hardees' then-current standard franchise agreement, which would have an initial term ending on the same date as the original agreement.
Additionally, the transferor, all individuals who initially signed the franchise agreement, and any guarantors must sign a general release and covenant not to sue Hardees. This release covers any claims against Hardees and its affiliates, including those arising from federal, state, and local laws, the franchise agreement itself, or the operation of the franchised restaurant. This is a standard practice to protect Hardees from potential future litigation related to the previous franchisee's operation of the business.
Furthermore, the transferor must remain liable for all obligations to Hardees incurred before the transfer date and must execute any instruments Hardees reasonably requests to evidence this liability. This ensures that Hardees can still pursue the original franchisee for any outstanding debts or liabilities incurred during their operation of the franchise. In addition to these documents, the franchisee and proposed transferee must sign all other documents and take such actions as Hardees may require to protect its rights under the franchise agreement.