What is the relationship between the Initial Franchise Fee for a Hardees restaurant in Item 5 and the estimated total initial investment in Item 7?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
forth in the Asset Purchase Agreement the parties will sign as part of the sale.
ITEM 7
ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT TO DEVELOP A HARDEE'S RESTAURANT AT A TRAVEL CENTER LOCATION OR GAS AND CONVENIENCE LOCATION (1)
| Type of Expenditure | Low Amount | High Amount | Method of Payment (2) | When Due | To Whom Payment Is To Be Made | |
|---|---|---|---|---|---|---|
| Fees to HR: | ||||||
| Initial Franchise Fee (3) | $25,000 | $25,000 | Lump sum or installments | See Item 5 | HR | |
| Opening Training | $32,000 | $72,000 | As incurred | See Item 5 | Vendors, HR | |
| Support Team Fee (3) | ||||||
| Type of Expenditure | Low Amount | High Amount | Method of Payment (2) | |||
| Total Fees to HR | $57,000 | |||||
| Build-Out Costs: | ||||||
| Point of Sale System | $55,000 | $72,000 | Vendors, HR and | |||
| (4) | third parties | |||||
| Soft Costs (5) | $5,000 | $25,000 | As arranged | As incurred | Vendors and third parties | |
| Equipment (4) | $350,000 | $540,000 | As arranged | As incurred | Vendors, HR | |
| Signage (6) | $15,000 | $55,000 | As arranged | As incurred | Vendors and third parties | |
| Total Build-Out | $425,000 | $692,000 | ||||
| Costs | ||||||
| Preliminary Operating Expenses: | ||||||
| Initial Training (7) | $20,000 | $60,000 | As arranged | As incurred | Third parties | |
| Pre-Opening Costs (8) | $26,000 | $44,000 | As arranged | As incurred | Vendors, HR | |
| Additional Funds - | $160,000 | $250,000 | As arranged | As incurred | Vendors, HR | |
| 3 months (9) | ||||||
| Total Preliminary | $206,000 | $354,000 | ||||
| Operating Expenses | ||||||
| TOTAL | $688,000 $1,143,000 | |||||
| ESTIMATED | ||||||
| INITIAL | ||||||
| INVESTMENT (10) | ### NOTES |
(1) This table reflects a low-high range of costs for each of the major cost categories of the initial investment for a Franchised Restaurant developed at a Travel Center Location and Gas and Convenience Location, including a Conversion Restaurant. Typically, the building, site work and improvements for the Franchised Restaurant at a Travel Center Location or Gas and Convenience Location are paid by the Travel Center Host or owner of the Gas and Convenience Location.
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the Initial Franchise Fee is a component of the total estimated initial investment. Item 5 specifies that the Initial Franchise Fee is $25,000, but it can be reduced to $15,000 for restaurants developed under a Development Agreement, including Conversion Restaurants. Furthermore, Hardees may waive the $15,000 Initial Franchise Fee if the restaurant opens six months before the contractual opening date outlined in the Development Agreement.
Item 7 provides a detailed breakdown of the estimated initial investment required to develop a Hardees restaurant at a Travel Center Location or Gas and Convenience Location. The table in Item 7 lists the Initial Franchise Fee as a separate line item under "Fees to HR," with a fixed amount of $25,000. The total estimated initial investment ranges from $688,000 to $1,143,000, which includes various costs such as build-out, equipment, signage, training, pre-opening expenses, and additional funds for the first three months of operation.
Therefore, the Initial Franchise Fee represents a portion of the total initial investment. Prospective franchisees should note the conditions under which the fee may be reduced or waived, as detailed in both Item 5 and the Development Agreement. Reviewing these figures with a business advisor is recommended to fully understand the financial obligations and potential cost variations depending on the specific location and circumstances of the franchise.