During the Due Diligence Period, what rights does Hardees have regarding access to the Hardees franchised restaurant and location?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will afford HR and its representatives access to the Franchised Restaurant and the Franchised Location at all reasonable times for the purpose of conducting inspections of the Assets; provided that such access does not unreasonably interfere with Franchisee's operation of the Franchised Restaurant.
- H. During the Due Diligence Period, at its sole option and expense, HR may (1) cause the title to the Assets that consist of real estate interests ("Real Estate Assets") to be examined by a nationally recognized title company and conduct lien searches as to the other Assets; (2) procure "AS BUILT" surveys of the Real Estate Assets; (3) procure environmental assessments and testing with respect to the Real Estate Assets; and/or (4) inspect the Assets that consist of leasehold improvements, equipment, vehicles, furnishings, fixtures, signs and inventory ("Fixed Assets") to determine if the Fixed Assets are in
satisfactory working condition. Prior to the end of the Due Diligence Period, HR shall notify Franchisee in writing of any objections that HR has to any finding disclosed in any title or lien search, survey, environmental assessment or inspection. If Franchisee cannot or elects not to correct any such title defect, environmental objection or defect in the working condition of the Fixed Assets, HR will have the option to either accept the condition of the Assets as they exist or rescind its option to purchase on or before the Closing.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, during the Due Diligence Period, HR (the franchisor) has specific rights regarding access to the franchised restaurant and location. Hardees is allowed access to the Franchised Restaurant and the Franchised Location at all reasonable times to conduct inspections of the Assets. However, this access should not unreasonably interfere with the franchisee's operation of the restaurant.
Hardees, at its sole option and expense, can also examine the title to real estate assets through a nationally recognized title company and conduct lien searches on other assets. They can procure "AS BUILT" surveys of the Real Estate Assets, conduct environmental assessments and testing, and inspect leasehold improvements, equipment, vehicles, furnishings, fixtures, signs, and inventory to ensure they are in satisfactory working condition.
Following these inspections, Hardees must notify the franchisee in writing of any objections found in the title or lien search, survey, environmental assessment, or inspection. If the franchisee cannot or chooses not to correct these issues, Hardees has the option to either accept the assets in their current condition or rescind its option to purchase before the closing date. This thorough due diligence process protects Hardees by ensuring the assets meet their standards or allowing them to withdraw from the purchase if significant issues are discovered.