What happens if the transferee or their affiliates are not in compliance with their obligations to Hardees?

According to Hardees's 2025 Franchise Disclosure Document, if the transferee or their affiliates are not in compliance with their obligations to Hardees, Hardees may not consent to the transfer. Specifically, as of the date of the request for Hardees's consent to the transfer, the transferee and each of the transferee's affiliates that have entered into a development or franchise agreement with Hardees or its affiliates must be in compliance with all obligations to Hardees or its affiliates under those agreements.

This requirement ensures that any new franchisee and their related business entities are in good standing with Hardees before a transfer is approved. Hardees aims to maintain a consistent standard of operation and financial responsibility across its franchise network. By enforcing this provision, Hardees seeks to avoid bringing in franchisees who have a history of non-compliance or financial instability, which could negatively impact the brand's reputation and the performance of the transferred restaurant.

For a prospective Hardees franchisee, this means that if they plan to transfer their franchise in the future, they need to ensure not only their own compliance but also the compliance of any affiliated businesses with Hardees. Failure to do so could result in Hardees withholding consent for the transfer, potentially hindering the franchisee's exit strategy or business plans. This also applies to potential buyers; Hardees will assess their existing relationship with the brand, if any, and their adherence to existing franchise agreements.