Does the Hardees franchise agreement prohibit the Developer from acquiring rights with the intent to generate funds for entities engaged in terrorist activity?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer acknowledges that under applicable U.S. law, including, without limitation, Executive Order 13224, signed on September 23, 2001 ("Order"), HR is prohibited from engaging in any transaction with any person engaged in, or with a person aiding any person engaged in, acts of terrorism, as defined in the Order. Accordingly, Developer represents and warrants to HR that, as of the date of this Agreement, neither Developer nor any person holding any ownership interest in Developer, controlled by Developer, or under common control with Developer is designated under the Order as a person with whom business may not be transacted by HR, and that Developer: (1) does not, and hereafter shall not, engage in any terrorist activity; (2) is not affiliated with and does not support any individual or entity engaged in, contemplating or supporting terrorist activity; and (3) is not acquiring the rights granted under this Agreement with the intent to generate funds to channel to any individual or entity engaged in, contemplating or supporting terrorist activity, or to otherwise support or further any terrorist activity.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the franchise agreement explicitly addresses compliance with U.S. laws regarding terrorism. The agreement states that the Developer (franchisee) cannot acquire rights with the intention of generating funds for individuals or entities involved in terrorist activities. This is part of Hardees's broader effort to comply with U.S. laws, including Executive Order 13224.
Specifically, the Developer must represent and warrant to Hardees that neither the Developer nor anyone with an ownership interest in the Developer is designated under the Order as someone with whom Hardees cannot transact business. Furthermore, the Developer must affirm that they do not engage in terrorist activity, are not affiliated with or supporting any individual or entity involved in terrorist activity, and are not acquiring rights under the agreement to generate funds for such activities.
This provision is a standard practice in franchising to ensure compliance with anti-terrorism laws and to protect the brand's reputation. It places a legal and ethical obligation on the Hardees franchisee to avoid any association with terrorism-related activities. Failure to comply with this provision could result in termination of the franchise agreement and potential legal consequences.