Can Hardees reject a proposed Developer Transfer if the sales price is too high?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) The sales price shall not be so high, in HR's reasonable judgment, as to jeopardize the ability of the transferee to develop, maintain, operate and promote the Franchised Restaurants and meet financial obligations to HR, third party suppliers and creditors.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees can reject a proposed Developer Transfer if, in their reasonable judgment, the sales price is too high.
Hardees makes this judgment to ensure that the proposed transferee will be able to successfully develop, maintain, operate, and promote the franchised restaurants. They also want to ensure the transferee can meet their financial obligations to Hardees, third-party suppliers, and creditors. This protects the Hardees brand and ensures the continued success of the franchise system.
This provision is designed to prevent a new franchisee from being burdened with excessive debt from the outset, which could lead to financial instability and potential failure. By retaining the right to assess the sales price, Hardees aims to safeguard the financial health of its franchisees and the overall network. This is a fairly common practice in franchising, as franchisors want to ensure that new franchisees are set up for success and can meet their financial obligations.