What are the two main obligations of the Development Principal for a Hardees franchise if a Multi-Unit Development Manager is not named and approved?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
The Development Principal must own at least a 10% equity ownership interest in you, or in your general partner if you are a limited partnership, unless modified by us in our sole discretion. (This requirement does not apply if you were a publicly-held entity or a wholly-owned subsidiary of a publiclyheld entity as of the date of the first franchise-related agreement between you and us.) The Development Principal must be a member of the Continuity Group and have full control over the day-to-day development of the Franchised Restaurants. Unless you have named, and we have approved, a Multi-Unit Development Manager (discussed below), the Development Principal must: (1) devote full time and best efforts to the supervising development of the Franchised Restaurants; and (2) maintain his/her primary residence within a reasonable driving distance of the Development Territory, unless waived in writing by us. The Development Principal will be required to successfully complete our development training and any additional training required by us. If you are developing restaurants in multiple markets that are franchised
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 62–63)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, if a Multi-Unit Development Manager is not named and approved, the Development Principal has specific obligations. The Development Principal must devote full time and best efforts to supervising the development of the Hardees Franchised Restaurants. Additionally, the Development Principal must maintain their primary residence within a reasonable driving distance of the Development Territory, unless this requirement is waived in writing by Hardees.
These requirements ensure that the Development Principal is actively involved and accessible during the development phase of the Hardees franchise. By requiring full-time dedication, Hardees aims to ensure that the development process receives the necessary attention and effort. The residency requirement further emphasizes the need for the Development Principal to be physically present and readily available to address any issues or opportunities that may arise within the Development Territory.
For a prospective Hardees franchisee, these obligations highlight the level of commitment expected from the Development Principal. It is crucial to understand that without an approved Multi-Unit Development Manager, the Development Principal must personally fulfill these responsibilities. This could impact the franchisee's ability to delegate tasks and may require a significant time investment. Franchisees should carefully consider these requirements and assess their capacity to meet them before entering into a franchise agreement with Hardees.
It's also important to note that Hardees retains the discretion to waive the residency requirement in writing. This provides some flexibility, but franchisees should not assume that a waiver will be granted. They should discuss this requirement with Hardees during the due diligence process to determine the likelihood of obtaining a waiver if needed.