What expenses can Hardees charge a franchisee for support during the restaurant opening?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
not previously provided HR with a fully-signed copy of its lease or sublease for the Franchised Location, or proof that Franchisee has purchased the real estate for the Franchised Location, Franchisee shall immediately upon execution of this Agreement provide HR with a copy of the fully-signed lease or sublease, together with the executed Hardee's Lease Addendum in the form attached as Appendix G. For purposes of this Agreement, the effective date of the lease or sublease, or the closing date of the purchase of the real property, shall be the "Property Control Date".
4. CONSTRUCTION OF THE FRANCHISED RESTAURANT
A. Development Training
Franchisee shall complete, to HR's satisfaction, any development training required by HR. Franchisee shall pay HR, for each person attending development training, a tuition fee as established by HR from time to time. Franchisee also may attend optional development training as offered by HR from time to time, subject to payment of a tuition fee as established by HR from time to time. Franchisee will be required to pay all travel, living and other expenses incurred by Franchisee and its employees while attending development training and optional development training.
B. Restaurant Development
Franchisee assumes all cost, liability and expense for developing, constructing and equipping the Franchised Restaurant. HR will furnish to Franchisee prototypical plans and specifications for a Hardee's Restaurant, including requirements for dimensions, design, image, interior layout, decor, fixtures, equipment, signs, furnishings, storefront and color scheme. It shall be Franchisee's responsibility to have prepared all required construction plans and specifications to suit the shape and dimensions of the Franchised Location and Franchisee must ensure that these plans and specifications comply with applicable ordinances, building codes and permit requirements and with lease requirements and restrictions. Franchisee shall use only registered architects, registered engineers, and professional and licensed contractors.
Franchisee shall submit proposed construction plans, specifications and drawings for the Franchised Restaurant ("Plans") to HR and shall, upon HR's request, submit all revised or "as built" Plans during the course of such construction. HR will review the Plans and notify Franchisee within 30 days after HR receives the Plans, or such longer period as HR requires, whether the Plans are approved. HR's approval shall not be unreasonably withheld. Once HR has approved the Plans and Franchisee has signed each page of the Plans acknowledging the approval and Franchisee's obligations for compliance, no substantial change shall be made to the Plans without the prior approval of HR, which shall not be unreasonably withheld. If, in the course of construction, any such change in the Plans is contemplated, HR's approval must first be obtained before proceeding. HR shall approve or disapprove Plan changes within 10 business days after receipt.
Franchisee is prohibited from beginning site preparation or construction prior to receiving written notification from HR that it has approved the Plans. All construction must be in accordance with Plans approved by HR and must comply in all respects with applicable laws, ordinances and local rules and regulations. The Franchised Restaurant may not open if construction has not been performed in substantial compliance with Plans approved by HR, and this Agreement may be terminated if such non-compliance is not cured within a commercially reasonable amount of time. HR may furnish guidance to Franchisee in developing the Franchised Restaurant and may periodically inspect the premises during its development.
C. Commencement and Completion of Construction
Construction of the Franchised Restaurant shall commence within 6 months after the Property Control Date ("Construction Commencement Date").
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, franchisees are responsible for covering various costs associated with opening a restaurant. Specifically, the franchisee assumes all expenses related to developing, constructing, and equipping the franchised restaurant. This includes obtaining and maintaining all necessary permits and licenses, constructing improvements to the location according to Hardees's approved plans, purchasing and installing required fixtures, equipment, furnishings, and signs, and purchasing the initial inventory of approved products and materials.
Hardees will provide prototypical plans and specifications for the restaurant, including requirements for dimensions, design, image, interior layout, decor, fixtures, equipment, signs, furnishings, storefront, and color scheme. However, the franchisee is responsible for preparing all required construction plans to suit the location's specific shape and dimensions, ensuring compliance with local ordinances, building codes, permit requirements, and lease restrictions. The franchisee must use registered architects, engineers, and licensed contractors for this purpose.
Furthermore, the franchisee must complete any required development training to Hardees's satisfaction and pay the associated tuition fees for each person attending. The franchisee is also responsible for covering all travel, living, and other expenses incurred by themselves and their employees while attending this training. Hardees will review the franchisee's construction plans and notify them of approval, but any substantial changes to the plans require Hardees's prior approval. If Hardees intervenes to resolve customer complaints, they may charge the franchisee an amount sufficient to cover their reasonable costs and expenses.