What entities are the Co-Issuers of the senior secured notes for Hardees?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
A-2 Notes, anticipated repayment date December 2027 | 384,000 | 388,000 | | 2.865% Series 2021-1 Class A-2 Notes, anticipated repayment date June 2028 | 173,700 | 175,500 | | 7.253% Series 2024-1 Class A-2 Notes, anticipated repayment date March 2031 | 347,375 | | | Unamortized deferred financing costs on Senior Notes | (15,256) | (12,176) | | Total debt, net | 1,124,194 | 1,119,824 | | Less current portion | (11,800) | (11,800) | | Long-term debt, less current portion | $ 1,112,394 | $ 1,108,024 |
As of January 31, 2025, the aggregate maturities of our long-term debt, based on the anticipated repayment date and excluding the effects of amortization of the deferred financing costs on the Class A-2 Notes are as follows:
| 2026 | $ 11,800 |
|---|---|
| 2027 | 11,800 |
| 2028 | 383,800 |
| 2029 | 398,675 |
| 2030 |
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Carl's Jr. Funding LLC and Hardee's Funding LLC are the Co-Issuers for the senior secured notes. These entities, collectively referred to as the "Co-Issuers", are indirect, wholly-owned subsidiaries of Hardees. They issue senior secured notes under securitized facility loans. The Co-Issuers are permitted to issue additional series of notes in the future, provided certain conditions are met as outlined in the indenture governing the facility loans.
As of January 31, 2025, the Co-Issuers had several outstanding series of fixed-rate senior secured notes. These include the 2018-1 Class A-2-III Notes with an initial principal amount of $250,000, the 2020-1 Class A-2 Notes with an initial principal amount of $400,000, the 2021-1 Class A-2 Notes with an initial principal amount of $180,000, and the 2024-1 Class A-2 Notes with an initial principal amount of $350,000. These notes are collectively referred to as the "Class A-2 Notes".
These Senior Notes are secured by substantially all assets of the Co-Issuers and their subsidiaries and immediate holding companies, known as the "CKE Securitization Entities." However, it's important to note that these notes are not guaranteed by or secured with the assets of CKE or its other subsidiaries, including CKE Restaurants. The CKE Securitization Entities are required to report and remit weekly cash flows to the trustee of the Senior Notes, with these cash flows being subject to a priority of payments as defined in the Indenture. Any excess cash flow, after meeting the requirements of these priorities, is remitted to CKE Restaurants as an equity distribution.
For a prospective Hardees franchisee, understanding the financial structure and obligations of the Co-Issuers is crucial. While the franchisee is not directly involved in these financial arrangements, the overall financial health of the parent company and its ability to manage its debt obligations can impact the support and resources available to franchisees. It is advisable for potential franchisees to review the complete financial statements and related notes in the FDD, and to seek professional financial advice to fully understand the implications of these senior secured notes.