What section of the Hardees Franchise Agreement outlines the grounds for termination by Hardees 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 grounds for termination by Hardees with cause. Hardees can terminate the agreement if a franchisee defaults, including remaining 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 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 closure of the Franchised Restaurant for more than 5 days, insolvency, bankruptcy, material breach of covenants, unauthorized transfer, 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.
These termination provisions are typical in franchise agreements, as they protect the franchisor's brand and system standards. However, the specific events that trigger termination and the cure periods can vary. Prospective Hardees franchisees should carefully review Section 21 of the Franchise Agreement to understand their obligations and the potential consequences of failing to meet them. Understanding these terms is crucial for avoiding default and maintaining a successful franchise operation.