What is the initial minimum lease term for Hardees' sale-leaseback restaurant properties?

According to Hardees' 2025 Franchise Disclosure Document, the initial minimum lease terms for the company's sale-leaseback transactions are 20 years and include renewal options. This applies to all of Hardees' restaurant property financing method sale-leaseback transactions, whether assumed or completed by CKE Securitization Entities. As of the FDD, Hardees has entered into agreements with independent third parties under which they sold and leased back a total of 125 restaurant properties.

This arrangement means that Hardees retains the ability to repurchase the properties. For accounting purposes, this prevents sale recognition because the leased properties are real estate, and Hardees has determined that no two real estate assets are substantially the same. The closing costs and other fees related to these transactions are treated as deferred financing costs, which reduce the liability balance and are amortized to interest expense over the initial minimum lease term.

For a prospective franchisee, this indicates that Hardees utilizes long-term lease agreements as part of its financial strategy. The fact that these leases include renewal options provides Hardees with flexibility in managing its real estate portfolio. The ability to repurchase the properties also gives Hardees a degree of control over its restaurant locations. Franchisees should be aware of these long-term commitments and how they might affect the financial stability of the franchise system.