If there is a change in the Continuity Group for a Hardees Developer, what action must the Developer take?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
If Developer is a business entity, Appendix C lists those persons who comprise Developer's "Continuity Group." HR and Developer acknowledge and agree that it is their intent that the members of the Continuity Group include the Development Principal (as defined in Section 8.F.) and (1) all holders of a direct or indirect, legal or beneficial interest of 10% or more ("10% Owners") in Developer; (2) if Developer is a limited partnership, all 10% Owners of Developer's general partner; and (3) all 10% Owners of a business entity that owns a controlling interest in Developer. In the event of any change in the Continuity Group or in the ownership interests of any member of the Continuity Group, Developer shall update Appendix C to reflect the change. The Continuity Group shall at all times own at least 51% of the ownership interests in Developer.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, if there is any change in the Continuity Group, the Developer must update Appendix C to reflect the change. The Continuity Group includes the Development Principal, all holders of a direct or indirect, legal or beneficial interest of 10% or more in the Developer, all 10% Owners of the Developer's general partner if the Developer is a limited partnership, and all 10% Owners of a business entity that owns a controlling interest in the Developer.
This requirement ensures that Hardees is always aware of the individuals who have significant ownership and control over the development entity. Appendix C lists the persons who comprise the Developer's Continuity Group. The Continuity Group must collectively own at least 51% of the ownership interests in the Developer.
This provision is important for Hardees because the members of the Continuity Group are required to guarantee the Developer's payment and performance under the Development Agreement. Maintaining an accurate record of the Continuity Group allows Hardees to enforce these guarantees effectively. Any changes in ownership or control could affect the enforceability of these guarantees, so Hardees requires prompt updates to Appendix C.