How is the purchase price determined for the assets Hardees purchases from a franchisee?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
s and inventory (non-perishable products, materials and supplies) used in the Franchised Restaurant, and the real estate fee simple or the lease or sublease for the Franchised Location. HR shall be entitled to the entry of interlocutory and permanent orders of specific performance by a court of competent jurisdiction if Franchisee fails or refuses to timely meet its obligations under this Section 23.
- B. HR shall have the unrestricted right to assign this option to purchase the Assets. HR or its assignee shall be entitled to all customary representations and warranties that the Assets are free and clear (or, if not, accurate and complete disclosure) as to: (1) ownership, condition and title; (2) liens and encumbrances; (3) environmental and hazardous substances; and (4) validity of contracts and liabilities inuring to HR or affecting the Assets, whether contingent or otherwise.
- C. The purchase price for the Assets ("Purchase Price") shall be their fair market value, (or, for leased assets, the fair market value of Franchisee's lease) determined as of the effective date of purchase in a manner that accounts for reasonable depreciation and condition of the Assets; provided, however, that the Purchase Price shall take into account the termination of this Agreement. Further, the Purchase Price for the Assets shall not contain any factor or increment for any trademark, service mark or other commercial symbol used in connection with the operation of the Franchised Restaurant nor any goodwill or "going concern" value for the Franchised Restaurant. HR may exclude from the Assets purchased in accordance with this Section any equipment, vehicles, furnishings, fixtures, signs, and inventory that are not approved
as meeting then-current standards for a Hardee's Restaurant or for which Franchisee cannot deliver a Bill of Sale in a form satisfactory to HR.
- D. If HR and Franchisee are unable to agree on the fair market value of the Assets within 30 days after Franchisee's receipt of HR's notice of its intent to exercise its option to purchase the Assets, the fair market value shall be determined by two professionally certified appraisers, Franchisee selecting one and HR selecting one within 60 days after Franchisee's receipt of HR's notice of intent to exercise its purchase option.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, the purchase price for assets Hardees buys from a franchisee is determined by their fair market value, without including any value for trademarks or goodwill associated with the Hardees restaurant. The fair market value accounts for reasonable depreciation and the condition of the assets at the time of purchase, while also considering the impact of the franchise agreement's termination.
If Hardees and the franchisee can't agree on the fair market value within 30 days of Hardees expressing intent to purchase, both parties will each select a professionally certified appraiser within 60 days. If the higher appraisal exceeds the lower one by more than 10%, a third appraiser is chosen by the first two to provide another valuation. The average of the appraisals (whether from two or three appraisers) will then be the conclusive purchase price.
The appraisers are granted full access to the Hardees restaurant, its location, and the franchisee's financial records to assess the value of leasehold improvements, equipment, furnishings, fixtures, signs, and inventory. The costs for these appraisers are split equally between Hardees and the franchisee. Hardees then has 10 days after the purchase price is determined to exercise its option to buy the assets by notifying the franchisee in writing. The purchase will be paid in cash or equivalent at closing, which must occur within 60 days of Hardees' purchase notice.