What investigations is Hardees allowed to conduct during the Due Diligence Period to determine the condition of the Hardees franchise assets?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- H. During the Due Diligence Period, at its sole option and expense, HR may (1) cause the title to the Assets that consist of real estate interests ("Real Estate Assets") to be examined by a nationally recognized title company and conduct lien searches as to the other Assets; (2) procure "AS BUILT" surveys of the Real Estate Assets; (3) procure environmental assessments and testing with respect to the Real Estate Assets; and/or (4) inspect the Assets that consist of leasehold improvements, equipment, vehicles, furnishings, fixtures, signs and inventory ("Fixed Assets") to determine if the Fixed Assets are in
satisfactory working condition. Prior to the end of the Due Diligence Period, HR shall notify Franchisee in writing of any objections that HR has to any finding disclosed in any title or lien search, survey, environmental assessment or inspection. If Franchisee cannot or elects not to correct any such title defect, environmental objection or defect in the working condition of the Fixed Assets, HR will have the option to either accept the condition of the Assets as they exist or rescind its option to purchase on or before the Closing.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, during the Due Diligence Period, Hardees has the right to conduct investigations to determine the condition of the franchise assets. Specifically, Hardees may examine the title to real estate assets through a nationally recognized title company and conduct lien searches on other assets. They can also procure "AS BUILT" surveys of the real estate assets and conduct environmental assessments and testing.
Furthermore, Hardees is allowed to inspect leasehold improvements, equipment, vehicles, furnishings, fixtures, signs, and inventory, which are referred to as "Fixed Assets," to ensure they are in satisfactory working condition. Hardees must notify the franchisee in writing of any objections resulting from these searches, surveys, assessments, or inspections.
If the franchisee is unable or unwilling to correct any title defects, environmental issues, or defects in the working condition of the fixed assets, Hardees has the option to either accept the assets in their current condition or rescind its option to purchase. This comprehensive due diligence process allows Hardees to thoroughly evaluate the assets before finalizing the purchase, protecting their investment and ensuring compliance with their brand standards.