If a Hardees developer, guarantor, or their affiliate holds an interest in other restaurants franchised by Hardees or its affiliates, what action is required, and under what condition can this requirement be waived?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
If Developer, any guarantor or any parent, subsidiary or affiliate of Developer holds any interest in other restaurants that are franchised by HR or its affiliates, the party who owns that interest shall execute, concurrently with this Agreement, a form of cross-guarantee to HR and its affiliates for the payment of all obligations for such restaurants, unless waived in writing by HR in its sole discretion. For purposes of this Agreement, an affiliate of Developer is any company controlled, directly or indirectly, by Developer or Developer's parent or subsidiary.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, if a Hardees developer, any guarantor, or any parent, subsidiary, or affiliate of the developer holds any interest in other restaurants that are franchised by Hardees or its affiliates, the party who owns that interest must execute a form of cross-guarantee to Hardees and its affiliates. This cross-guarantee ensures the payment of all obligations for such restaurants.
This requirement can be waived, but only if Hardees provides a written waiver in its sole discretion. An affiliate of the developer is defined as any company controlled, directly or indirectly, by the developer or the developer's parent or subsidiary.
For a prospective Hardees developer, this means that if they or their related business entities have ownership in other Hardees franchises, they will likely be required to provide a cross-guarantee, potentially increasing their financial obligations and liabilities across all their Hardees ventures. The waiver provision offers some flexibility, but it is entirely up to Hardees' discretion, so developers should not assume a waiver will be granted.