What standards must a proposed Hardees transferee meet to be approved by HR?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) The proposed transferee (and if the proposed transferee is not a natural person, all persons that have any direct or indirect interest in the transferee as HR may require) must demonstrate to HR's satisfaction extensive experience in high quality restaurant operations of a character and complexity similar to Hardee's Restaurants; must meet the managerial, operational, experience, quality, character and business standards for a franchisee promulgated by HR from time to time; must possess a good character, business reputation and credit rating; must have an organization whose management culture is compatible with HR's management culture; and must have adequate financial resources and working capital, as determined by HR in its sole discretion, to meet Franchisee's obligations under this Agreement.
(2) If the Transfer is a sale, the sales price shall not be so high, in HR's reasonable judgment, as to jeopardize the ability of the transferee to develop, maintain, operate, remodel, re-image, refresh and promote the Franchised Restaurant and meet financial obligations to HR, third party suppliers and creditors.
(5) Franchisee or the proposed transferee, as determined by HR, must complete all remodel, renovations, re-image, maintenance and facility upgrades to modernize and conform the Franchised Restaurant to the image of the System for new franchised restaurants.
(6) Unless waived by HR in its sole discretion, the transferee and those employees hired by the transferee to fill certain designated positions shall complete the training provided in Sections 11.A.-B.
(7) The transferee and each of the transferee's affiliates that have entered into a development or franchise agreement with HR or its affiliates must, as of the date of the request for HR's consent to the Transfer, be in compliance with all obligations to HR or its affiliates under those agreements.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, a proposed transferee must meet several standards to be approved by HR (presumably Hardees' corporate entity). These standards cover a range of qualifications related to business operations, character, financial stability, and compatibility with Hardees' existing system.
The transferee must demonstrate extensive experience in high-quality restaurant operations similar to Hardees. They need to meet managerial, operational, experience, quality, and character standards, as well as the business standards that Hardees promulgates from time to time. Furthermore, the transferee must possess a good character, business reputation, and credit rating. Their organization's management culture must align with Hardees' management culture. Critically, the transferee must have adequate financial resources and working capital to meet the obligations outlined in the Franchise Agreement, as determined solely by Hardees.
In addition to these qualifications, Hardees will assess whether the sales price of the transfer is reasonable, ensuring it does not jeopardize the transferee's ability to maintain and operate the Hardees restaurant, including remodeling, re-imaging, and promoting the franchise. The transferee must also meet all obligations to Hardees and its affiliates, and not be in material default of any agreements. Hardees also mandates that the transferee complete all required remodels, renovations, and upgrades to conform the restaurant to the current image of the Hardees system.
Finally, Hardees requires that the transferee and certain designated employees complete the training programs outlined in the FDD. The transferee and any affiliates with existing agreements with Hardees must be in compliance with all obligations under those agreements. All parties involved, including the franchisee, individuals who executed the agreement, and guarantors, must execute a general release and covenant not to sue Hardees, protecting the company from potential legal claims. These stipulations ensure that any new franchisee aligns with Hardees' operational, financial, and legal standards, safeguarding the brand and the broader franchise system.