What entities are considered the Co-Issuers for the Hardees senior secured notes?
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 are indirect, wholly-owned subsidiaries of Hardees. The Co-Issuers are permitted to issue additional series of notes in the future, but this is subject to certain conditions as outlined in the Indenture, which governs 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 the assets of the CKE Securitization Entities, which include the Co-Issuers and their subsidiaries. However, they 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 is remitted to CKE Restaurants as an equity distribution.
For a prospective Hardees franchisee, understanding the financial structure and obligations of the parent company is crucial. While the franchisee's assets are not directly tied to these senior notes, the overall financial health of Hardees can impact the support and resources available to franchisees. It is advisable to review the complete financial statements and consult with a financial advisor to fully assess the implications of these senior notes.