If Hardees modifies a covenant in Section 20, what action is the franchisee required to take?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
HR shall have the right, in its sole discretion, to reduce the scope of any covenant in this Section 20 effective immediately upon Franchisee's receipt of written notice, and Franchisee agrees that it shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Section 29.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees has the right to modify any covenant in Section 20. If Hardees chooses to do so, the franchisee must comply with the modified covenant immediately upon receiving written notice.
This means that Hardees franchisees must be prepared to adapt to changes in the covenants outlined in Section 20 of their franchise agreement. These covenants often relate to competitive restrictions, site control, and other key operational aspects. The franchisee does not have the option to negotiate or refuse the modification.
This clause gives Hardees significant flexibility to adjust the franchise agreement terms during its term. While such modifications must be communicated in writing, franchisees have little recourse but to accept and implement the changes promptly. This is a standard clause in many franchise agreements, but prospective franchisees should carefully review Section 20 to understand the types of covenants that could be modified and the potential impact on their business.