What was the revenue from franchised Hardees restaurants and other sources?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchised restaurants and other revenue includes royalties, franchise fees, and rent revenue. Royalties from franchised restaurants are based on a percentage of net sales of the franchised restaurant and are recognized as earned. Royalties are typically billed and paid monthly and are usually 4% to 5% per restaurant. Franchise development and commitment fees are deferred when received, allocated to each agreed upon restaurant, and recognized as revenue over the contractual term of each respective franchise agreement, once the restaurant has opened. Initial franchise fees, training fees, renewal fees and transfer fees are recognized as revenue over the contractual term of the franchise agreements, once the restaurant has opened. Upfront franchise fees are typically billed and paid when a new franchise agreement becomes effective or when an existing agreement is transferred to another franchisee. These franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. Further, franchise fees are forfeited and recognized as revenue upon the termination of the related commitments to open new franchised restaurants, the franchised restaurants closing prior to the end of the contractual agreement or the franchised restaurants being acquired by the Company. Property revenues consist of rental income from properties we lease or sublease to franchisees. Property revenues are accounted for in accordance with applicable accounting guidance for leases (see Leases above). We present all revenue net of sales tax.
Advertising funds revenue includes contributions to HNAF, Hardee's Co-ops, the Carl's Jr. national advertising fund (the "Carl's Jr. Fund") and certain international advertising funds (collectively, the "Advertising Funds") by franchisees. Revenue related to these contributions is based on a percentage of sales of the franchised restaurants and is recognized as earned.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
I am unable to provide the exact revenue figures for franchised Hardees restaurants and other sources, as the provided excerpts from the 2025 Franchise Disclosure Document do not include a specific financial statement detailing these revenues. However, the FDD does discuss how Hardees recognizes revenue from franchised restaurants.
According to the FDD, revenue from franchised Hardees restaurants includes royalties, franchise fees, and rent revenue. Royalties are based on a percentage of net sales, typically between 4% and 5% per restaurant, and are recognized as earned, usually billed and paid monthly. Franchise development and commitment fees are deferred when received and recognized over the contractual term once the restaurant opens. Initial franchise fees, training, renewal, and transfer fees are also recognized over the franchise agreement's term after the restaurant opens. Upfront franchise fees are billed and paid when a new agreement is effective or transferred.
The FDD also mentions that Hardees recognizes revenue from unredeemed gift cards (breakage revenue) and advertising fund contributions. Breakage revenue is estimated and recognized over time based on historical redemption rates. Advertising fund revenue comes from franchisee contributions based on a percentage of sales and is recognized as earned. These revenues are important for Hardees as they reflect the financial health and performance of its franchise system.
To obtain the specific revenue figures for franchised Hardees restaurants and other related sources, a prospective franchisee should carefully review the complete financial statements within Item 21 of the 2025 FDD. Additionally, it would be prudent to directly ask the franchisor for detailed financial performance data during the due diligence process to gain a comprehensive understanding of the revenue streams associated with franchised operations.