What minimum equity ownership interest must the Operating Principal have in my Hardees franchise?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
The Operating Principal must own at least a 10% equity ownership interest in you, or in your general partner if you are a limited partnership, unless modified by us in our sole discretion, and be a person acceptable to both us and you. (This requirement does not apply if you were a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity as of the date of the first franchise-related agreement between you and us.) The Operating Principal must be a member of the Continuity Group and have full control over the day-to-day activities of the Franchised Restaurant and those other restaurants (that are franchised by us or our affiliates) operated by you in the same geographic market as the Franchised Restaurant, including control over the standards of operation and financial performance. Unless you have named, and we have approved, a Multi-Unit Manager (discussed below), the Operating Principal must: (1) devote full time and best efforts to the supervision and conduct of the Franchised Restaurant and those other restaurants (that are franchised by us or our affiliates) operated by you in the same geographic market as the Franchised Restaurant; and (2) maintain his/her primary residence within a reasonable driving distance of the Franchised Restaurant, unless waived in writing by us. The Operating Principal will be required to successfully complete the FMTP and any additional training required by us. If you operate restaurants in multiple markets that are franchised by us or our affiliates, an individual meeting the above qualifications will serve as the Operating Principal in at least one market.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 62–63)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the Operating Principal must have a minimum equity ownership interest. Specifically, the Operating Principal must own at least 10% equity ownership interest in the franchisee or in the general partner if the franchisee is a limited partnership. However, Hardees retains the discretion to modify this requirement. This equity ownership requirement does not apply if the franchisee was a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity on the date of the first franchise-related agreement between the franchisee and Hardees.
This requirement ensures that the Operating Principal, who is responsible for the day-to-day activities and financial performance of the Hardees restaurant, has a vested interest in the success of the franchise. The Operating Principal must also be a member of the Continuity Group, giving them full control over the restaurant's operations and standards within the same geographic market. They must devote full time and best efforts to the supervision and conduct of the franchised restaurant and maintain their primary residence within a reasonable driving distance, unless Hardees waives this requirement in writing.
Furthermore, the Operating Principal is required to successfully complete the Franchise Management Training Program (FMTP) and any additional training that Hardees requires. If a franchisee operates Hardees restaurants in multiple markets, an individual meeting these qualifications must serve as the Operating Principal in at least one market. This structure ensures that each Hardees location has a qualified and invested individual overseeing its operations, maintaining brand standards, and driving financial performance.