When transferring a Hardees franchise, what must the developer, all individuals who executed the agreement, and all guarantors execute?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- (5) Developer, all individuals who executed this Agreement and all guarantors of Developer's obligations must execute a general release and a covenant not to sue, in a form satisfactory to HR, of any and all claims against HR and its affiliates and their respective past and present officers, directors, managers, shareholders, members, agents and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and claims arising out of, or relating to, this Agreement and any other agreements between Developer and HR or its affiliates and all other restaurants operated by Developer that are franchised by HR or its affiliates.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, when transferring a franchise, the developer, all individuals who executed the agreement, and all guarantors of the developer's obligations must execute a general release and a covenant not to sue. This release and covenant must be in a form satisfactory to Hardees.
This release covers any and all claims against Hardees and its affiliates, including their past and present officers, directors, managers, shareholders, members, agents, and employees, in both their corporate and individual capacities. The claims include, but are not limited to, those arising under federal, state, and local laws, rules, and ordinances. It also encompasses claims arising out of, or relating to, the franchise agreement and any other agreements between the developer and Hardees or its affiliates, as well as all other restaurants operated by the developer that are franchised by Hardees or its affiliates.
In essence, this requirement ensures that Hardees is protected from any potential future legal claims by the transferring franchisee and related parties. This is a standard practice in franchising to provide legal closure during a transfer. A prospective franchisee should carefully review the specific terms of the release and covenant not to sue with legal counsel to fully understand the scope of the liabilities being released.