If a Hardees franchisee sells a franchised restaurant developed under the Development Agreement, under what conditions will that restaurant continue to count towards the franchisee's obligations under the Development Schedule?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. If, during the Development Term, Developer sells a Franchised Restaurant that was developed pursuant to this Agreement, that Franchised Restaurant will continue to be counted as a Franchised Restaurant for the purpose of meeting Developer's obligations under the Development Schedule, provided that the sale has been consented to by HR and only so long as that restaurant continues to be operated pursuant to a franchise agreement with HR or its affiliates.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, if a developer sells a Hardees restaurant that was developed under the Development Agreement, it can still count toward meeting the developer's obligations under the Development Schedule. However, this is conditional.
First, Hardees must consent to the sale. This implies that Hardees has the right to approve or disapprove the sale, potentially based on the buyer's qualifications or other factors. Second, the restaurant must continue to operate under a franchise agreement with Hardees or its affiliates. This means the new owner must enter into a franchise agreement with Hardees to maintain the restaurant's status as counting toward the original developer's obligations.
This condition ensures that even after the sale, the restaurant remains a part of the Hardees system and adheres to Hardees' standards. For a prospective developer, this clause provides some flexibility in managing their development obligations while ensuring the continued integrity of the Hardees brand.