Does HR's decision regarding a Hardees franchise transfer create any liability to the transferee if they experience financial difficulties?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
HR's decision with respect to a proposed Transfer shall not create any liability on the part of HR: (a) to the transferee, if HR consents to the Transfer and the transferee experiences financial difficulties; or (b) to Franchisee or the proposed transferee, if HR withholds consent to the Transfer.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees's decision regarding a franchise transfer does not create liability to the transferee if they experience financial difficulties. Specifically, even if Hardees consents to a transfer, the company assumes no liability to the new franchisee should that franchisee subsequently face financial challenges.
This provision protects Hardees from potential lawsuits or claims arising from the transferee's business operations after the transfer is completed. It makes it clear that Hardees's approval of the transfer is not a guarantee of the new franchisee's success, nor does it imply any responsibility for their financial performance. The responsibility for the success of the Hardees franchise lies solely with the new franchisee.
This is a fairly standard clause in franchise agreements, as franchisors typically want to avoid being held responsible for the business decisions and financial outcomes of their franchisees. Prospective Hardees franchisees should carefully consider this clause and understand that they are assuming all financial risks associated with operating the franchise once the transfer is approved.