If a Developer violates the transfer restrictions in the Hardees franchise agreement, can HR terminate the agreement?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the grounds for termination that may be stated elsewhere in this Agreement, HR may terminate this Agreement, and the rights granted by this Agreement, upon written notice to Developer without an opportunity to cure upon the occurrence of any of the following events:
- (8) Any Transfer that requires HR's prior written consent occurs without Developer having obtained that prior written consent.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, HR (the franchisor) has the right to terminate the Development Agreement if a Developer undertakes a transfer that requires HR's prior written consent without obtaining that consent. This is explicitly stated as one of the grounds for termination. This means that any attempt by the Developer to transfer rights or obligations under the agreement without Hardees's approval can lead to the termination of the agreement.
This provision protects Hardees by ensuring they maintain control over who is developing Hardees restaurants within the designated territory. Transfer restrictions are common in franchising to ensure that new franchisees or developers meet the franchisor's standards and have the necessary qualifications and financial resources. By including this termination clause, Hardees emphasizes the importance of adhering to the transfer protocols outlined in the agreement.
For a prospective Hardees developer, this highlights the critical need to fully understand and comply with the transfer provisions in the Development Agreement. Failure to do so could result in the loss of development rights and any investments made. Developers should seek legal counsel to ensure they are fully aware of the conditions under which a transfer requires consent and the process for obtaining that consent from Hardees.