How are royalties from Hardees franchised restaurants typically billed and paid?
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.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, royalties from franchised restaurants are a percentage of the restaurant's net sales and are recognized as earned by Hardees. Typically, these royalties are billed and paid on a monthly basis. The standard royalty rate ranges from 4% to 5% per restaurant.
For a prospective Hardees franchisee, this means that each month, they will need to calculate their net sales and remit between 4% and 5% of that amount to Hardees as a royalty payment. This ongoing payment is in exchange for the continued use of the Hardees brand, system, and support. Accurately tracking sales and ensuring timely royalty payments are critical for maintaining a good standing with the franchisor.
It is important for franchisees to factor this monthly royalty payment into their financial projections and business planning. Failure to pay royalties can result in penalties, legal action, or even termination of the franchise agreement. Therefore, understanding the terms of royalty payments is a key aspect of the franchise agreement.