What are the insolvency-related events that would cause a Hardees developer to be in default?

Based on the 2025 Hardees Franchise Disclosure Document, a Hardees developer can be in default under several conditions. These include defaults related to agreements with Hardees or its affiliates, real estate or equipment leases, financing instruments, or vendor/supplier relationships. Specifically, if the developer, a Development Principal, any member of the Continuity Group, any 10% Owner, or any Affiliated Entity remains in default beyond the applicable cure period under any agreement with Hardees or its affiliates, it constitutes a default.

This also applies to defaults under any real estate lease, equipment lease, or financing instrument relating to a Franchised Restaurant. Furthermore, defaults with any vendor or supplier to a Franchised Restaurant can trigger a default, provided that if the default is not by the developer, the developer is given written notice of the default and 30 days to cure it.

These provisions are important for prospective Hardees developers to understand, as they highlight the interconnected financial obligations and relationships that can impact their standing with Hardees. Failing to meet obligations, even those of affiliated entities, can lead to a default, potentially jeopardizing the development agreement. Franchisees should ensure they have a clear understanding of all related agreements and financial obligations to avoid such defaults.