What happens if a Hardees developer begins construction of a Franchised Restaurant before receiving a fully-executed Franchise Agreement and paying the Initial Franchise Fee?

According to Hardees's 2025 Franchise Disclosure Document, a developer faces termination of their development agreement with Hardees if they begin construction of a franchised restaurant before receiving a fully-executed Franchise Agreement and paying the Initial Franchise Fee. This is a significant risk for developers, as it means Hardees can terminate the agreement without providing an opportunity to correct the issue.

This stipulation underscores the importance of adhering strictly to Hardees's development procedures and timelines. The developer must ensure all agreements are fully executed and fees are paid before commencing any construction activities. Failing to do so constitutes a material breach of the development agreement.

This requirement is not uncommon in the franchise industry, as franchisors need to protect their brand and ensure franchisees are fully committed and compliant before significant investments are made. Prospective Hardees developers should carefully manage their project timelines and maintain close communication with Hardees to avoid any premature construction activities that could jeopardize their development rights.