If a Hardees franchisee fails to maintain the required insurance, what right does HR have?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- F. Should Franchisee, for any reason, fail to procure or maintain at least the insurance required by this Section 15, as revised from time to time pursuant to the OPM or otherwise in writing, HR shall have the immediate right and authority, but not the obligation, to procure such insurance and charge its cost to Franchisee. All out-of-pocket costs incurred by HR in obtaining such insurance on behalf of Franchisee shall be reimbursed to HR by Franchisee immediately upon Franchisee's receipt of an invoice therefor.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, if a franchisee fails to maintain the required insurance, Hardees has the right to procure the insurance and charge the cost to the franchisee. Specifically, Hardees has the immediate right and authority, but not the obligation, to procure the required insurance if the franchisee fails to do so.
The franchisee is responsible for reimbursing Hardees for all out-of-pocket costs incurred by Hardees in obtaining the insurance on the franchisee's behalf. This reimbursement is due immediately upon the franchisee's receipt of an invoice from Hardees.
This clause ensures that the Hardees brand is protected even if a franchisee neglects their insurance obligations. It is important for prospective franchisees to understand that failing to maintain adequate insurance can result in Hardees stepping in to secure coverage and billing the franchisee for the expenses.