If Hardees' HR subleases the Franchised Location from the franchisee, who is responsible for indemnifying whom from ongoing liability under the lease, and from what date?

According to Hardees's 2025 Franchise Disclosure Document, if Hardees subleases the Franchised Location from the franchisee, the responsibility for indemnification is divided between Hardees Restaurants LLC (HR) and the franchisee. HR will indemnify and hold the franchisee harmless from any ongoing liability under the lease from the date HR assumes possession of the Franchised Location. Conversely, the franchisee will indemnify and hold HR harmless from any liability under the lease prior to and including that date. This means that liability is split based on the date of possession, with each party responsible for the periods they controlled the property.

For a prospective Hardees franchisee, this clause provides clarity on liability should Hardees decide to sublease the location. It protects the franchisee from liabilities arising after Hardees takes possession, ensuring they are not held responsible for issues that occur once they no longer control the property. Similarly, it protects Hardees from liabilities incurred by the franchisee before the sublease agreement.

This type of indemnification agreement is fairly standard in franchise agreements where the franchisor might take over the lease. It is crucial for franchisees to understand this clause, as it defines their responsibilities and protections in the event of a sublease. Franchisees should ensure they have fulfilled all lease obligations up to the date of transfer to avoid any potential liabilities.