Does HR have sole discretion in determining if a proposed Hardees transferee has adequate financial resources?

According to Hardees's 2025 Franchise Disclosure Document, when a franchisee seeks to transfer their franchise to a new owner, Hardees (referred to as HR in the document) retains sole discretion in determining whether the proposed transferee possesses adequate financial resources to meet the obligations of the franchise agreement. This means Hardees has the final say on whether the potential buyer has enough capital and assets to successfully run the franchise.

Hardees also assesses several other factors related to the proposed transfer. The potential transferee must demonstrate experience in high-quality restaurant operations similar to Hardee's, meet managerial and operational standards, and possess a good character, business reputation, and credit rating. The sales price of the franchise cannot be so high that it jeopardizes the transferee's ability to maintain and operate the restaurant, meet financial obligations to Hardees, and pay third-party suppliers and creditors.

This level of control is typical in franchising, as franchisors want to ensure that new franchisees are financially stable and capable of upholding the brand's standards. For a prospective Hardees franchisee looking to sell their business in the future, it's crucial to understand that finding a buyer who meets Hardees's financial criteria is essential for the transfer to be approved. The franchisee should also be aware that Hardees's decision regarding a transfer does not create any liability for Hardees, even if the transferee experiences financial difficulties after the transfer is approved.