If a Hardees franchisee pays a Development Fee, is it refundable, and can it be credited towards the Initial Franchise Fee?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
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Other than these nine (9) actions, no litigation is required to be disclosed in this Item.
ITEM 4
BANKRUPTCY
No bankruptcy is required to be disclosed in this Item.
ITEM 5
INITIAL FEES
Development Fee
If you enter into a Development Agreement for the development of three (3) or more Franchised Restaurants to be located at Travel Center Locations or Gas and Convenience Locations, you must pay HR a Development Fee of $10,000 for each Franchised Restaurant you agree to develop at the time you sign the Development Agreement (this includes the 2025 HR Travel Center Development Incentive Program). The Development Fee is not refundable. If you execute a Franchise Agreement for a new Franchised Restaurant pursuant to the Development Agreement, the $10,000 Development Fee associated with this new Franchised Restaurant will be credited against the Initial Franchise Fee for such Franchised Restaurant. With respect to each Franchised Restaurant developed under the Development Agreement, you will execute the form of Franchise Agreement in use at the time you begin to develop the Franchised Restaurant and the respective 2025 HR Travel Center Development Incentive Program Addendum or 2025 DIP Addendum, if applicable.
Initial Franchise Fee
The Initial Franchise Fee is $25,000, although the balance of the Initial Franchise Fee is reduced to $15,000 for a Franchised Restaurant developed pursuant to the terms of a Development Agreement, including any Conversion Restaurant. You must pay HR the Initial Franchise Fee, less any Development Fee already paid, when you execute the Franchise Agreement. The Initial Franchise Fee is fully earned by HR when paid, and it is not refundable.
Source: Item 5 — Initial Fees (FDD pages 27–29)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the Development Fee is non-refundable. This fee applies if a franchisee enters into a Development Agreement to develop three or more franchised restaurants at Travel Center or Gas and Convenience Locations. The Development Fee is $10,000 for each restaurant the franchisee agrees to develop, payable when signing the Development Agreement.
The FDD specifies that if the franchisee proceeds to execute a Franchise Agreement for a new Hardees restaurant under the Development Agreement, the $10,000 Development Fee associated with that restaurant will be credited against the Initial Franchise Fee. The Initial Franchise Fee is $25,000, but it is reduced to $15,000 for restaurants developed under a Development Agreement, including Conversion Restaurants.
Therefore, while the initial $10,000 Development Fee is non-refundable, it effectively functions as a partial pre-payment of the Initial Franchise Fee if the franchisee follows through with opening the Hardees restaurant as planned under the Development Agreement. This arrangement incentivizes franchisees to commit to multiple locations while mitigating some of the upfront financial burden.