If a Hardees franchisee develops any new concepts, processes or improvements relating to the System, what is the franchisee obligated to do?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- E. If Franchisee develops any new concepts, processes or improvements relating to the System, whether or not pursuant to an HR authorized test, Franchisee promptly shall notify HR and provide HR with all information regarding the new concept, process or improvement, all of which shall become the property of HR and its affiliates and which may be incorporated into the System without any payment to Franchisee. Franchisee, at its expense, promptly shall take all actions deemed necessary or desirable by HR to vest in HR ownership of such concepts, processes or improvements.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, if a franchisee develops any new concepts, processes, or improvements related to the Hardees system, they must promptly notify Hardees and provide all information regarding the new development. This applies whether or not the development occurred during a Hardees-authorized test.
Upon notification, the new concept, process, or improvement automatically becomes the property of Hardees and its affiliates. Hardees may incorporate these developments into the Hardees system without providing any payment or compensation to the franchisee who originated them.
Furthermore, the franchisee is obligated, at their own expense, to take any actions deemed necessary or desirable by Hardees to legally transfer ownership of the new concepts, processes, or improvements to Hardees. This ensures that Hardees has full legal rights to use and protect the new developments as part of its system. This is a fairly standard clause in franchise agreements, as it allows the franchisor to maintain control over the brand and system standards, while also benefiting from the innovations of its franchisees.