What are some examples of non-curable defaults that could lead to termination of the Hardees Development Agreement?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary |
|---|---|---|
| a. Length of the franchise term | Section 1.A | The term is from the date of signing of the Development Agreement to the first to occur of: (1) the date that the last Franchised Restaurant required by the Development Schedule opens for business; or (2) the date the last Franchised Restaurant is required to be opened under the Development Schedule. |
| b. Renewal or extension of the | Not Applicable | |
| term | ||
| c. Requirements for you to | Not Applicable | |
| renew or extend | ||
| d. Termination by you | Not Applicable | |
| e. Termination by us without | Not Applicable | |
| cause | ||
| f. Termination by us with cause | Section 13 | We may terminate upon default, which includes, but is not limited to, remaining in default beyond any applicable cure period under any agreement with us or our affiliates, including the Franchise Agreement. |
| g. “Cause” defined-curable defaults | Section 13.A.(13) | You have 10 days to cure monetary defaults. You have 30 days to cure defaults other than those discussed in paragraph h. |
| h. “Cause” defined-non-curable defaults | Sections 13.A.(1)-(12) | Non-curable defaults include: failure to obtain written site acceptance on schedule; failure to open and operate the scheduled number of Franchised Restaurants; begin construction before receipt of fully-signed Franchise Agreement; insolvency; bankruptcy; material breach of covenants; transfer without our prior written consent; material misrepresentation; falsification of reports; felony convictions; default beyond cure period under other agreements with HR or its affiliates, under any real estate or |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 64–69)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, there are specific non-curable defaults that could lead to the termination of the Development Agreement. These defaults, as outlined in Section 13.A.(1)-(12) of the Development Agreement, include failing to obtain written site acceptance on schedule and not opening and operating the scheduled number of franchised restaurants as required. Additionally, beginning construction before receiving a fully signed Franchise Agreement also constitutes a non-curable default.
Further non-curable defaults include events indicating financial instability or breach of contract, such as insolvency or bankruptcy. A material breach of covenants within the agreement, transferring the agreement without Hardees's prior written consent, or making material misrepresentations are also non-curable defaults. The falsification of reports or a felony conviction can also result in immediate termination. Finally, defaulting beyond any cure period under other agreements with Hardees or its affiliates, including real estate agreements, can lead to termination of the Development Agreement.
These stipulations are important for prospective Hardees developers to understand, as these defaults do not offer an opportunity for correction and can lead to immediate termination of the Development Agreement. Franchisees should ensure they meet all scheduled obligations, maintain financial stability, and operate with transparency to avoid these non-curable defaults. Understanding these terms is crucial for maintaining a successful and compliant franchise relationship with Hardees.