In evaluating a Hardees franchise transfer, what is HR's primary concern regarding the sales price?

According to Hardees's 2025 Franchise Disclosure Document, when evaluating a franchise transfer, Hardees is primarily concerned that the sales price is not so high that it would jeopardize the transferee's ability to successfully operate the restaurant. Specifically, Hardees wants to ensure the new franchisee can develop, maintain, operate, remodel, re-image, refresh, and promote the Hardees restaurant, while also meeting financial obligations to Hardees, third-party suppliers, and creditors. This is a critical consideration for Hardees in approving a transfer.

This requirement protects the Hardees brand and ensures the continued success of the franchise system. If a transferee pays too much for a franchise, they may struggle to invest in the business, maintain quality, and meet their financial obligations. This could lead to a decline in the restaurant's performance, which would negatively impact the Hardees brand and the other franchisees in the system.

This provision gives Hardees significant control over franchise transfers. A prospective franchisee needs to carefully consider the purchase price and ensure they have sufficient capital to operate the business successfully after the transfer. It is advisable to create detailed financial projections and seek professional advice to determine a sustainable sales price that aligns with Hardees's criteria. This also highlights the importance of understanding all potential costs associated with operating the franchise, including royalties, marketing fees, debt service, insurance, and other charges.