How does Hardees recognize revenue from company-operated restaurants?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Company-operated restaurants revenue is recognized upon the sale of food or beverage to a customer in the restaurant, which is when our obligation to perform is satisfied.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, revenue from company-operated restaurants is recognized when a customer purchases food or a beverage. At the point of sale, Hardees considers its obligation to the customer fulfilled and records the revenue. This is a standard practice in the restaurant and retail industries, where revenue recognition typically occurs at the point of transaction.
This policy means that Hardees accounts for sales immediately when they happen in company-owned stores. For a prospective franchisee, this is relevant in understanding how the overall financial performance of Hardees is measured and reported. It also provides insight into the revenue streams that contribute to the franchisor's financial stability.
It's important to note that this revenue recognition method applies specifically to company-operated restaurants. Revenue from franchised locations, which includes royalties and fees, is recognized differently, typically over the term of the franchise agreement or as royalties are earned. Understanding these distinctions is crucial for anyone considering investing in a Hardees franchise.