What is Hardees' management required to evaluate regarding the company's ability to continue as a going concern when preparing the combined consolidated financial statements?

According to Hardees's 2025 Franchise Disclosure Document, when preparing the combined consolidated financial statements, Hardees's management must evaluate whether any conditions or events, when considered together, create significant doubt about the company's ability to continue operating as a going concern for one year after the consolidated financial statements are issued. This evaluation is a standard accounting practice to ensure that the financial statements provide an accurate representation of the company's financial health and stability.

This evaluation is crucial for prospective franchisees because it provides insight into the financial stability of Hardees. If management identifies conditions that raise substantial doubt, it could indicate potential risks associated with investing in a Hardees franchise. These conditions might include factors such as declining revenues, increasing debt, or other financial difficulties that could impact the long-term viability of the company.

It is important to note that this evaluation is based on conditions and events considered in the aggregate, meaning that individual issues might not be significant on their own but could become concerning when combined. Franchisees should review the financial statements and any related disclosures carefully to understand the factors that could affect Hardees's ability to continue as a going concern. Consulting with a financial advisor can also help potential franchisees assess the risks and make informed decisions about investing in a Hardees franchise.