What are the possible interest rates for the Series 2018-1 Variable Funding Notes for Hardees?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
The Series 2018-1 Variable Funding Notes bear interest at a variable interest rate equal to (a) a commercial paper rate plus 3.00%, (b) the term SOFR rate plus 3.00% or (c) 2.00% plus the greater of (i) the Prime Rate, (ii) the Federal Funds rate plus 0.50%, or (iii) term SOFR plus 1.00%. The actual interest rate incurred is determined by how the borrowings were funded by participating investors, but in any event, will fall under one of the three scenarios described above.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the Series 2018-1 Variable Funding Notes bear interest at a variable rate. The interest rate is determined by how the borrowings were funded by participating investors, but it will fall under one of three scenarios.
The first scenario is a commercial paper rate plus 3.00%. The second is the term SOFR rate plus 3.00%. The third possible interest rate is 2.00% plus the greater of (i) the Prime Rate, (ii) the Federal Funds rate plus 0.50%, or (iii) term SOFR plus 1.00%.
It is important to note that these are variable interest rates, meaning they can fluctuate over time based on changes in the underlying commercial paper rate, the term SOFR rate, the Prime Rate, and the Federal Funds rate. A prospective Hardees franchisee should consult with financial advisors to understand the potential impact of these variable rates on Hardees's financial obligations and overall financial health.