Does Hardees guarantee any of the franchisee's leases?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
lease or sublease including any renewal terms, the terms of the Hardee's Lease Addendum, attached as Exhibit 1.
Neither HR's receipt of the lease or sublease nor any requirement that Franchisee enter into a written modification to the lease or sublease constitutes a warranty or representation by HR of any kind, express or implied, as to the lease or sublease's fairness or suitability or as to Franchisee's ability to comply with its terms, and HR does not assume any liability or responsibility to Franchisee or to any third parties due to its receipt and review of the lease or sublease.
Franchisee shall provide HR with a copy of the fully-executed lease or sublease, including the Hardee's Lease Addendum, (for a term, including renewal terms, for at least the Initial Term of this Agreement), or proof Franchisee has purchased the real property, for the Authorized Site no later than 6 months after the written acceptance of the Authorized Site by HR, but, in any event, prior to the commencement of construction at the Authorized Site.
Source: Item 10 — Financing (FDD pages 43–44)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, Hardees does not guarantee a franchisee's lease. While Hardees requires franchisees to submit a copy of their lease or sublease, including the Hardee's Lease Addendum, this receipt and review do not constitute any warranty or representation by Hardees regarding the lease's fairness or the franchisee's ability to comply with its terms. Hardees explicitly states that it does not assume any liability or responsibility to the franchisee or any third parties due to its review of the lease.
This means that the franchisee bears the full responsibility for securing and complying with the lease terms. Hardees' involvement is limited to reviewing the lease for compliance with their brand standards and requirements, as outlined in the Hardee's Lease Addendum. The franchisee should carefully review the lease terms and seek legal counsel to ensure they understand their obligations and potential risks.
This arrangement is fairly typical in the franchise industry. Franchisors often require franchisees to secure their own locations and leases, as local market knowledge and negotiation skills are crucial in finding suitable sites and favorable lease terms. By not guaranteeing the lease, Hardees avoids potential financial liabilities associated with franchisee locations. However, the franchisee must ensure the lease aligns with Hardees' requirements, including the lease term matching or exceeding the franchise agreement's initial term.