What is the length of the renewal term options available to a Hardees franchisee?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
different time period is agreed to in writing by HR.
Notwithstanding the foregoing, if, during the term of this Agreement, Franchisee, through no act or failure to act on its part (except the failure to extend the lease for the Franchised Location through the Initial Term of this Agreement), loses the right to possession of the Franchised Location, the Initial Term shall expire as of the date of the loss of the right to possession. However, if the right to possession is lost through no act or failure to act on Franchisee's part, Franchisee may relocate the Franchised Restaurant (without paying any additional initial franchise fee or transfer fee) at its expense and the Initial Term shall not expire if: (1) HR accepts the new location; (2) Franchisee constructs and equips a Franchised Restaurant at the new location in accordance with the then-current System Standards and specifications; (3) a Franchised Restaurant at the new location is open to the public for business within 6 months after the loss of possession of the Franchised Location; and (4) Franchisee reimburses HR for all reasonable expenses actually incurred by HR in connection with the acceptance of the new location.
B. Renewal Term
- (1) At the expiration of the Initial Term, Franchisee shall have an option to remain a franchisee at the Franchised Location for a Renewal Term of 10 years or, at Franchisee's option, 5 years. Franchisee must give HR written notice of whether or not it intends to exercise its renewal option and the length of the proposed Renewal Term not less than 12 months, nor more than 24 months, before the expiration of the Initial Term. Notwithstanding the foregoing, if Franchisee subleases the Franchised Location from HR, Franchisee must give HR the notice described in the preceding sentence not less than 6 months, nor more than 12 months, before notice of renewal is required to be provided to the landlord under the master lease. Failure by Franchisee to timely provide HR the required notice constitutes a waiver by Franchisee of its option to remain a franchisee beyond the expiration of the Initial Term.
- (2) If Franchisee desires to continue as a franchisee for the Renewal Term, Franchisee must comply with all of the following conditions prior to and at the end of the Initial Term:
- (a) Franchisee shall not be in default under this Agreement or any other agreements between Franchisee and HR or its affiliates; Franchisee shall not be in default beyond the applicable cure period under any real estate lease, equipment lease or financing instrument relating to the Franchised Restaurant;
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, a franchisee has the option to renew their franchise agreement for either 10 years or 5 years. The franchisee must provide Hardees with written notice of their intent to renew, specifying the desired length of the renewal term, no less than 12 months and no more than 24 months before the initial term expires. However, if the franchisee subleases the location from Hardees, the notice period is reduced to between 6 and 12 months before the master lease renewal deadline. Failure to provide timely notice constitutes a waiver of the renewal option.
To qualify for renewal, the Hardees franchisee must not be in default of the franchise agreement or any other agreements with Hardees or its affiliates. They must also be current on all real estate leases, equipment leases, financing instruments, and payments to vendors and suppliers. Furthermore, the franchisee must not have been in default of any agreements with Hardees or its affiliates for the 12 months prior to the renewal notice and the 12 months before the initial term's expiration.
The Hardees franchisee is also required to make necessary capital expenditures to renovate and modernize the restaurant to meet the current image standards for new Hardee's restaurants at the time of the renewal notice. This includes interior and exterior design updates, decor, color schemes, furnishings, equipment, and any structural changes or modifications needed. The franchisee will be required to sign a new franchise agreement for the renewal term, which may differ from the original agreement, particularly in royalty fees and advertising obligations. The renewal fee is $5,000 for a 5-year term or $10,000 for a 10-year term.