Are there any exceptions to the restriction on owning a competing restaurant for a Hardees franchisee?

According to Hardees's 2025 Franchise Disclosure Document, there are specific exceptions to the non-compete clause for franchisees. During the term of the Franchise Agreement, the franchisee is restricted from owning or being involved with any restaurant business that meets certain criteria, such as deriving 20% or more of its sales from 'Designated Entrée Items' (including hamburger, chicken, and breakfast sandwiches) during any daypart, featuring these items in advertising, or operating in a quick-service format. This restriction has no geographical limitation during the agreement's term.

However, this restriction does not apply to the franchisee's existing restaurant or foodservice operations that are identified in Appendix A of the Franchise Agreement. Additionally, the restriction does not apply to other restaurants operated by the franchisee that are franchised by Hardees or its affiliates. Following the expiration, transfer, or termination of the Franchise Agreement, the non-compete restriction applies only to restaurant businesses located within a 2-mile radius of the Franchised Location and any Hardee's Restaurant.

In practical terms, a prospective Hardees franchisee who already owns a restaurant should ensure that their existing business is properly documented in Appendix A to be exempt from the non-compete restrictions. Furthermore, they can operate other franchised restaurants under the Hardees brand or its affiliates without violating the agreement. This provides some flexibility for franchisees with existing restaurant businesses or those looking to diversify within the Hardees system.

The definition of 'Designated Entrée Items' is subject to change by Hardees during the term of the agreement, which could potentially impact whether a franchisee's other restaurant ventures fall under the non-compete clause. It is important for prospective franchisees to carefully review Appendix A and understand the current definition of 'Designated Entrée Items' to assess any potential conflicts with their existing or planned business ventures.