Must a proposed Hardees transferee possess a good character, business reputation, and credit rating?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) The proposed transferee (and if the proposed transferee is not a natural person, all persons that have any direct or indirect interest in the transferee as HR may require) must demonstrate to HR's satisfaction extensive experience in high quality restaurant operations of a character and complexity similar to Hardee's Restaurants; must meet the managerial, operational, experience, quality, character and business standards for a franchisee promulgated by HR from time to time; must possess a good character, business reputation and credit rating; must have an organization whose management culture is compatible with HR's management culture; and must have adequate financial resources and working capital, as determined by HR in its sole discretion, to meet Franchisee's obligations under this Agreement.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, a proposed transferee must possess a good character, business reputation, and credit rating. Specifically, the proposed transferee must meet the managerial, operational, experience, quality, and character standards for a franchisee. Hardees also requires that the transferee's organization have a management culture compatible with Hardees's own.
This requirement ensures that any new Hardees franchisee maintains the brand's standards and reputation. Hardees needs to approve any transfer of ownership, and they will assess the proposed transferee's background and qualifications. This process helps Hardees maintain consistency and quality across all its franchise locations.
In addition to character and reputation, the proposed transferee must also have adequate financial resources and working capital to meet the obligations outlined in the Franchise Agreement. Hardees also considers whether the sales price of the transfer is reasonable, ensuring that the transferee is not financially burdened to the point where they cannot properly operate the franchise. This comprehensive evaluation aims to protect both Hardees's interests and the transferee's investment.