What is the purpose of the Development Incentive Program Addendum to the Hardees Restaurant Franchise Agreement?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS ADDENDUM to the Hardee's Restaurant Franchise Agreement dated as of, ("Franchise Agreement") between Hardee's Restaurants LLC ("HR") and |
|---|
| ("Franchisee") is entered into simultaneously with the |
| Franchise Agreement. |
| RECITALS |
| A. |
| In order to stimulate the development of new franchised Hardee's Restaurants and the |
| continued expansion of the System at eligible travel center and gas and convenience locations, HR has |
| established the 2025 HR Travel Center Development Incentive Program (the "Travel Center Program"). |
| B. |
| To be eligible for the Travel Center Program, the following requirements must be satisfied: |
| (i) the Hardee's Restaurant must be located at a travel center location or gas and convenience location that |
| is within ½ mile of an interstate or limited access highway and must include a combination of high rise |
| pylon sign, billboard or other highway sign, (ii) the travel center location or gas and convenience location |
| must be opened pursuant to a Development Agreement dated no later than May 24, 2026, (iii) Franchisee |
| must open the Franchise Restaurants from a travel center location or gas and convenience location by the |
| date(s) outlined in the corresponding Development Agreement, (iv) Franchisee may not be in default of its |
| obligations under its existing franchise agreements or related agreements with HR or its affiliates, (v) |
| Franchisee must be approved for growth by HR and its affiliates, (vi) Franchisee must satisfy HR's then |
| current financial and operational requirements for new restaurant development, and (vii) Franchisee and |
| the Hardee's Restaurant(s) otherwise meet the requirements of the Travel Center Program. |
| C. |
| Franchisee and HR are parties to a Development Agreement dated as of, |
| ,. |
| D. |
| Franchisee and the Franchised Restaurant are eligible to participate in the Travel Center |
| Program. |
| E. |
| The Franchised Restaurant opened pursuant to this Franchise Agreement qualifies as a |
| "Conversion Restaurant" as determined by HR. |
| F. |
| Consequently, HR and Franchisee are entering into this Addendum to modify the Franchise |
| Agreement to reflect the Franchisee's participation in the Program incentives. |
| AGREEMENT |
| NOW, THEREFORE, in consideration of the mutual covenants, agreements and obligations set |
| forth below, the parties, intending to be legally bound, agree to amend the Franchise Agreement as follows: |
| 1. |
| Reduced Royalty and APO for Limited Period of Time. Notwithstanding anything to the |
| contrary contained in the Franchise Agreement, HR agrees that the royalty fee to be paid by Franchisee for |
| the Franchised Restaurant will be reduced by: (A) 3% of Gross Sales for Gross Sales accruing during the |
| Franchised Restaurant's first 12 months of operation under the Franchise Agreement; (B) 2% of Gross Sales |
| for Gross Sales accruing during the Franchised Restaurant's second 12 months of operation under the |
| Franchise Agreement; and (C) 1% of Gross Sales for Gross Sales accruing during the Franchised |
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, the Development Incentive Program Addendum is designed to encourage the opening of new Hardees restaurants and support the growth of the Hardees system, specifically at travel centers, gas stations, and convenience store locations. Hardees Restaurants LLC ("HR") offers this program to stimulate development and expansion.
To be eligible for the Travel Center Program, franchisees must meet specific criteria, including the restaurant's location near an interstate or limited-access highway with appropriate signage, adherence to the Development Agreement's timeline (no later than May 24, 2026), compliance with existing franchise agreements, approval for growth by HR, and satisfaction of HR's financial and operational requirements. The addendum modifies the Franchise Agreement to reflect the franchisee's participation in the Program incentives.
If a Hardees franchisee is eligible for the program, the addendum will modify the franchise agreement to reflect the incentives. One such incentive is a reduction in the royalty fee for a limited time. The royalty fee is reduced by 3% of Gross Sales for the first 12 months of operation, 2% of Gross Sales for the second 12 months, and 1% of Gross Sales for the third 12 months.