If the Hardees Addendum is terminated, what happens to the royalty fee and APO for the franchised restaurant?

According to Hardees's 2025 Franchise Disclosure Document, if the Addendum is terminated, the royalty fee and APO (Advertising Pool Obligation) for the franchised restaurant will revert to the amounts specified in the original Franchise Agreement. This means that any reductions or modifications to these fees outlined in the Addendum will no longer be in effect, and the franchisee will be obligated to pay the royalty and APO fees as initially agreed upon in the Franchise Agreement.

This provision protects Hardees by ensuring that if a franchisee fails to meet certain obligations or defaults on agreements, the brand can revert to the standard fee structure. This could occur if the franchisee fails to open the restaurant on time or defaults on other agreements with Hardees. The reversion to the original fee structure is immediate upon termination of the Addendum.

For a prospective Hardees franchisee, this highlights the importance of understanding all terms and conditions within both the Franchise Agreement and any Addenda. Franchisees should pay close attention to the conditions that could lead to the termination of the Addendum, as this would result in an increase in their royalty and APO fees, impacting their profitability. It is crucial to maintain compliance with all agreements to avoid triggering the termination clause and the subsequent increase in fees.