Where must the Operating Principal maintain their primary residence in relation to the Hardees Franchised Restaurant?
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 is required to maintain their primary residence within a reasonable driving distance of the Franchised Restaurant. This requirement ensures that the Operating Principal can effectively supervise and manage the restaurant's day-to-day activities. However, Hardees may waive this requirement in writing at their discretion.
This residency requirement is in place unless a Multi-Unit Manager has been named and approved by Hardees. The Operating Principal must also own at least a 10% equity ownership interest in the franchisee entity, unless the franchisee was a publicly-held entity or a wholly-owned subsidiary of a publicly-held entity at the time of the initial franchise agreement. The Operating Principal must also be a member of the Continuity Group, having full control over the restaurant's operations, standards, and financial performance.
For a prospective Hardees franchisee, this means that the person designated as the Operating Principal must live close enough to the restaurant to actively manage it. If the franchisee operates multiple Hardees restaurants in the same geographic market, the Operating Principal's role extends to overseeing all those locations. The 'reasonable driving distance' is not specifically defined in the FDD, so it is important for potential franchisees to clarify this with Hardees during their due diligence. The possibility of a waiver provides some flexibility, but it is not guaranteed and requires written approval from Hardees.