What section of the Hardees Franchise Agreement outlines the conditions under which Hardees can terminate the agreement with cause?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| f. Termination by us with cause | Section 21 | We may terminate upon default, which includes, but is not limited to, remaining in default beyond any applicable cure period under any agreement with us or our affiliates, including any Development Agreement. |
| g. "Cause" defined-curable defaults | Section 21.B. | You have 10 days to cure monetary defaults. You have 30 days to cure defaults other than those discussed in paragraph h. |
| h. "Cause" defined-non-curable defaults | Sections 21.A., 21.B.(3) & 21.C. | Non-curable defaults include: closure of the Franchised Restaurant for more than 5 days; insolvency; bankruptcy; execution levied on your business or property; foreclosure; material breach of covenants; transfer without our prior written consent; material misrepresentation; falsification of reports; failure to open the Franchised Restaurant within 60 days after opening is authorized; imminent danger to public health or safety; loss of possession of the Franchised Location; felony conviction; breach of any representation or warranty; default beyond cure period under other agreements with HR or its affiliates, under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or with any vendor or supplier to the Franchised Restaurant; default after receipt of 2 or more notices of default within previous 12 months; and receipt of second consecutive failing score on an inspection. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 64–69)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Section 21 of the Franchise Agreement details the conditions under which Hardees can terminate the agreement with cause. Hardees may terminate the agreement if the franchisee is in default beyond any applicable cure period under any agreement with Hardees or its affiliates, including any Development Agreement.
The FDD outlines both curable and non-curable defaults. For curable defaults, a Hardees franchisee has 10 days to cure monetary defaults and 30 days to cure other types of defaults, except those listed as non-curable. Non-curable defaults, which allow Hardees to terminate the agreement immediately, include a range of serious issues such as closing the restaurant for more than 5 days, insolvency, bankruptcy, material breach of covenants, unauthorized transfer of the franchise, material misrepresentation, falsification of reports, failure to open the restaurant on time, imminent danger to public health or safety, loss of possession of the location, felony conviction, breach of any representation or warranty, and repeated defaults.
It is important for a prospective Hardees franchisee to carefully review Section 21 of the Franchise Agreement to fully understand what constitutes a default and the potential consequences. Understanding these termination conditions is crucial for maintaining a successful and compliant franchise operation. The fact that some defaults are non-curable means that Hardees can terminate the franchise agreement immediately without giving the franchisee an opportunity to correct the issue. This is not unusual in franchising, as franchisors need to protect their brand and system standards.