For a Hardees franchise, am I required to personally participate in the direct operation of the Franchised Restaurant?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
ct to this confidentiality requirement. You also agree not to contest our interest in the trade secrets and confidential and proprietary information that comprise the Hardee's System.
We are not required by any agreement to protect or defend copyrights or confidential information, although we intend to do so as appropriate.
ITEM 15
OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
You are not obligated to participate personally in the direct operation of the Franchised Restaurant; however, you must designate, and we must approve, a qualified individual to serve as the "Operating Principal" of your Franchised Restaurant. If you sign a Development Agreement, you must designate, and we must approve, a qualified individual to serve as your "Development Principal."
The Operating Principal must own at least a 10% equity ownership interest in you, or in your general partner if you are a limited partnership, unless modified by us in our sole discretion, and be a person acceptable to both us and you. (This requirement does not apply if you were a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity as of the date of the first franchise-related agreement between you and us.) The Operating Principal must be a member of the Continuity Group and have full control over the day-to-day activities of the Franchised Restaurant and those other restaurants (that are franchised by us or our affiliates) operated by you in the same geographic market as the Franchised Restaurant, including control over the standards of operation and financial performance. Unless you have named, and we have approved, a Multi-Unit Manager (discussed below), the Operating Principal must: (1) devote full time and best efforts to the supervision and conduct of the Franchised Restaurant and those other restaurants (that are franchised by us or our affiliates) operated by you in the same geographic market as the Franchised Restaurant; and (2) maintain his/her primary residence within a reasonable driving distance of the Franchised Restaurant, unless waived in writing by us. The Operating Principal will be required to successfully complete the FMTP and any additional training required by us.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 62–63)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, you are not required to personally participate in the direct operation of the franchised restaurant. However, you must designate and receive approval from Hardees for a qualified individual to act as the "Operating Principal."
The Operating Principal must have at least a 10% equity ownership interest in your business or its general partner, unless Hardees modifies this requirement at their discretion or if you were a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity as of the date of the first franchise-related agreement between you and Hardees. This individual must also be part of the Continuity Group and have full control over the day-to-day operations, including operational standards and financial performance, of the franchised restaurant and any other Hardees franchises you operate in the same geographic market.
Unless a Multi-Unit Manager has been approved, the Operating Principal must dedicate their full time and best efforts to supervising the restaurant and other Hardees restaurants you operate in the same market. They must also live within a reasonable driving distance of the franchised restaurant, unless Hardees waives this requirement in writing. The Operating Principal is required to successfully complete the Franchise Management Training Program (FMTP) and any additional training that Hardees requires. The franchised restaurant must also be under the on-site supervision of the Operating Principal, a Multi-Unit Manager, a restaurant General Manager, or a Site Manager, all of whom must meet Hardees' training qualifications for their positions.