What outstanding obligations related to the Hardees Franchised Restaurant must be satisfied before a transfer can occur?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) All of Franchisee's accrued monetary obligations to HR and its affiliates (whether arising under this Agreement or otherwise) and all other outstanding obligations related to the Franchised Restaurant (including, but not limited to, bills from suppliers, taxes, judgments and any required governmental reports, returns, affidavits or bonds) have been satisfied or, in the reasonable judgment of HR, adequately provided for.
HR reserves the right to require that a reasonable sum of money be placed in escrow to ensure that all of these obligations are satisfied.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, before a franchise can be transferred, all of the franchisee's accrued monetary obligations to Hardees and its affiliates must be satisfied. This includes obligations arising under the Franchise Agreement or otherwise.
In addition to monetary obligations, all other outstanding obligations related to the Hardees Franchised Restaurant must be satisfied. These obligations include, but are not limited to, bills from suppliers, taxes, judgments, and any required governmental reports, returns, affidavits, or bonds. Hardees retains the right to require that a reasonable sum of money be placed in escrow to ensure that all of these obligations are satisfied before the transfer is finalized.
Hardees must reasonably judge that all obligations have been adequately taken care of. This provision protects Hardees from potential liabilities and ensures that the new franchisee starts with a clean slate. It is common practice in franchising to ensure all financial and legal obligations are met before a transfer to maintain the integrity of the brand and system.