For a Hardees franchise, what are the conditions that must be met for a franchisee to relocate the franchised restaurant and maintain the initial term if they lose possession of the original location through no fault of their own?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, if, during the term of this Agreement, Franchisee, through no act or failure to act on its part (except the failure to extend the lease for the Franchised Location through the Initial Term of this Agreement), loses the right to possession of the Franchised Location, the Initial Term shall expire as of the date of the loss of the right to possession. However, if the right to possession is lost through no act or failure to act on Franchisee's part, Franchisee may relocate the Franchised Restaurant (without paying any additional initial franchise fee or transfer fee) at its expense and the Initial Term shall not expire if: (1) HR accepts the new location; (2) Franchisee constructs and equips a Franchised Restaurant at the new location in accordance with the then-current System Standards and specifications; (3) a Franchised Restaurant at the new location is open to the public for business within 6 months after the loss of possession of the Franchised Location; and (4) Franchisee reimburses HR for all reasonable expenses actually incurred by HR in connection with the acceptance of the new location.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, a franchisee may relocate their restaurant and maintain the initial franchise term if they lose possession of their location through no fault of their own, with one exception. The exception is if the franchisee fails to extend the lease for the franchised location through the initial term of the agreement.
To maintain the initial term, the franchisee must meet four specific conditions. First, Hardees must accept the new location. Second, the franchisee must construct and equip a Hardees restaurant at the new location according to the then-current system standards and specifications. Third, the new restaurant must be open to the public within six months after the loss of possession of the original location.
Finally, the franchisee is responsible for reimbursing Hardees for all reasonable expenses actually incurred by Hardees in connection with the acceptance of the new location. Meeting these conditions allows the franchisee to continue operating under the original terms of their agreement despite the unforeseen relocation.