What sections in the Hardees Franchise Agreement and Development Agreement address the franchisee's obligation to obtain insurance?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in Franchise Agreement (FA) and Development Agreement (DA) | Disclosure Document Item | |
|---|---|---|---|
| n. | Insurance | FA: Section 15 DA: Section 7 | Items 6, 7 & 8 |
- (6) Each insurance policy shall include a waiver of subrogation endorsement in favor of HR and its affiliates.
- (7) With respect to the Commercial General Liability, Automobile Liability and Umbrella/Excess Liability policies, HR and its affiliates shall be named as Additional Insured on a primary and non-contributory basis. With respect to the Commercial Property coverage, HR and its affiliates shall be named as Loss Payee.
- D. All required insurance policies shall be in full force and effect and Franchisee shall submit to HR evidence of satisfactory insurance and proof of payment therefore no later than the date the first of the following occurs: (1) 30 days prior to the scheduled opening date of the Franchised Restaurant; (2) the date Franchisee takes possession of the Franchised Location, or (3) the date construction commences at the Franchised Location, if Franchisee is contractually obligated for the construction. On each policy renewal date thereafter, Franchisee shall again submit evidence of satisfactory insurance and proof of payment therefor to HR. The evidence of insurance shall include a statement by the insurer that the policy or policies will not be canceled or materially altered without at least 30 days' prior written notice to HR. Upon request, Franchisee also shall provide to HR copies of all or any policies, and policy amendments and endorsements.
- E. Franchisee acknowledges that no requirement for insurance contained in this Agreement constitutes advice or a representation by HR that only such policies, in such amounts, are necessary to protect Franchisee from losses in connection with its business under this Agreement. Maintenance of this insurance, and the performance by Franchisee of its obligations under this Section, shall not relieve Franchisee of liability under the indemnification provisions of this Agreement.
- F. Should Franchisee, for any reason, fail to procure or maintain at least the insurance required by this Section 15, as revised from time to time pursuant to the OPM or otherwise in writing, HR shall have the immediate right and authority, but not the obligation, to procure such insurance and charge its cost to Franchisee. All out-of-pocket costs incurred by HR in obtaining such insurance on behalf of Franchisee shall be reimbursed to HR by Franchisee immediately upon Franchisee's receipt of an invoice therefor.
Source: Item 9 — Franchisee's Obligations (FDD pages 42–43)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the franchisee's obligation to obtain insurance is addressed in Section 15 of the Franchise Agreement and Section 7 of the Development Agreement. Item 9 in the FDD outlines the franchisee's obligations, and section (n) specifically points to these sections regarding insurance requirements.
Section 15 of the Franchise Agreement requires the franchisee to maintain certain insurance policies, including Commercial General Liability, Automobile Liability, and Umbrella/Excess Liability, where Hardees and its affiliates must be named as Additional Insured on a primary and non-contributory basis. For Commercial Property coverage, Hardees and its affiliates must be named as Loss Payee. Each insurance policy must include a waiver of subrogation endorsement in favor of Hardees and its affiliates.
The franchisee must provide evidence of satisfactory insurance and proof of payment to Hardees no later than 30 days before the scheduled opening date of the franchised restaurant, the date the franchisee takes possession of the location, or the date construction commences. Hardees retains the right, but not the obligation, to procure insurance on behalf of the franchisee if the franchisee fails to do so, and the franchisee is responsible for reimbursing Hardees for all costs incurred. Hardees also states that the insurance requirements do not constitute advice that these are the only necessary policies or amounts to protect the franchisee from losses.