For Hardees franchise site selection, who is responsible for conducting due diligence, investigation, and validation of a proposed site?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
HR will provide Developer with the following site selection assistance: (1) HR's site selection guidelines and, as Developer may request, a reasonable amount of consultation with respect thereto; and (2) such site evaluation as HR may deem advisable as part of its evaluation of Developer's request for site acceptance. Developer is solely responsible for conducting all such due diligence, investigation and validation with its own third party advisors with respect to a proposed site. HR's consent to a proposed site is simply for purposes of confirming that the site meets HR's then-current site selection criteria. Developer is solely responsible for conducting all such due diligence, investigation and validation with its own third party advisors with respect to a proposed site. HR's consent to a proposed site is simply for purposes of confirming that the site meets HR's then-current site selection criteria.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the developer, or franchisee, is solely responsible for conducting all due diligence, investigation, and validation of a proposed site. This includes working with their own third-party advisors to assess the site's suitability. Hardees will provide site selection guidelines and consultation upon request, and will also conduct its own site evaluation. However, Hardees' consent is primarily to confirm that the site meets their current selection criteria.
This means that while Hardees offers assistance and has its own criteria, the onus is on the franchisee to thoroughly investigate and validate the site's potential. This involves assessing various factors such as demographic characteristics, traffic patterns, parking, the character of the neighborhood, and competition from other businesses in the area. The franchisee must also consider the proximity to other businesses, including existing Hardees restaurants.
Hardees' acceptance of a site does not guarantee any specific sales volume or level of profitability. It simply means that the site meets the minimum criteria established by Hardees. The document emphasizes that real estate development is not a precise science, and Hardees assumes no liability or responsibility for the evaluation of the site's soil for hazardous substances, inspection for toxic materials, compliance with the Americans with Disabilities Act (ADA), or any other applicable law. The franchisee is responsible for obtaining satisfactory evidence that the site is free from environmental contamination and complies with ADA requirements.
In practical terms, a prospective Hardees franchisee should engage qualified third-party advisors to conduct thorough due diligence on any proposed site. This includes environmental assessments, legal compliance checks, and market research to determine the site's potential for success. The franchisee should not rely solely on Hardees' approval as a guarantee of the site's suitability but should make their own informed decision based on comprehensive investigation and validation.