Can Hardees require franchisees to use only certain brands of goods and materials?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that the reputation and goodwill of Hardee's Restaurants are based upon, and can only be maintained by, the sale of distinctive, high quality food products and beverages, and the presentation, packaging and service of such products and beverages in an efficient and appealing manner. HR may develop certain proprietary food products that will be prepared by or for HR according to HR's proprietary special recipes and formulas. HR also has developed standards and specifications for other food products, ingredients, seasonings, mixes, beverages, materials and supplies incorporated or used in the preparation, cooking, serving, packaging and delivery of prepared food products authorized for sale at Hardee's Restaurants. Franchisee agrees that the Franchised Restaurant will: (1) purchase those food
products developed by HR pursuant to a special recipe or formula only from HR, an affiliate of HR or a third party designated and licensed by HR to prepare and sell such products; and (2) purchase from manufacturers, distributors, vendors and suppliers (collectively "suppliers") approved by HR all other goods, food products, ingredients, spices, seasonings, mixes, beverages, materials, supplies and cleaning products used in the preparation of products and cleanliness of the Franchised Restaurant (collectively "goods"), as well as advertising materials, furniture, fixtures, equipment, smallwares, menus, forms, paper and plastic products, packaging or other materials (collectively "materials") that meet the standards and specifications promulgated by HR from time to time. HR has the right to require that Franchisee use only certain brands and to prohibit Franchisee from using other brands. HR may from time to time modify the list of approved brands and/or suppliers, and Franchisee shall not, after receipt of such modification in writing, reorder any brand from any supplier that is no longer approved.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, Hardees has the authority to mandate the use of specific brands for goods and materials used in the operation of a franchised restaurant. Hardees can also prohibit franchisees from using other brands. This is to maintain the reputation and goodwill of Hardee's restaurants by ensuring consistent quality and standards. Hardees may modify the list of approved brands and suppliers, and franchisees must comply with these changes upon written notification.
Hardees also has the right to approve suppliers for goods and materials, and may approve a supplier only for certain items. This allows Hardees to concentrate purchases with specific suppliers to potentially secure lower prices, better advertising support, or services for Hardee's restaurants. Approval of suppliers may depend on factors such as delivery frequency, reporting capabilities, and service standards. Hardees may also establish its own commissaries and distribution facilities as approved suppliers.
If a franchisee wishes to use a supplier not already approved by Hardees, they must submit a written request for approval. Hardees can require inspections of the supplier's facilities and testing of products, with the franchisee bearing the costs of these inspections and tests. Hardees retains the right to re-inspect approved suppliers and revoke approval if they fail to meet the required criteria. Franchisees are obligated to maintain sufficient inventory of approved goods and materials to fully support the potential of their Hardee's restaurant.
These stipulations are included in the franchise agreement to ensure uniformity and quality across all Hardee's locations, which is a common practice in franchising. By controlling the brands and suppliers, Hardees aims to maintain consistent product quality, customer experience, and brand image. This also allows Hardees to potentially negotiate better deals with suppliers, benefiting the entire franchise system.