Under the Hardees agreement, what happens to the royalty fee and APO if the Addendum is terminated?

According to Hardees' 2025 Franchise Disclosure Document, if the Addendum to the Franchise Agreement is terminated, the royalty fee and APO (Advertising Pool Obligation) for the franchised restaurant will revert to the amounts specified in the original Franchise Agreement. This means that any reductions or modifications to these fees outlined in the Addendum will no longer be in effect.

Termination of the Addendum can occur under specific conditions. These include failing to open the franchised restaurant within 120 days after the contractual opening date as per the Development Agreement, or if the franchisee receives a written notice of default under any agreement with Hardees or its affiliates during the first three years of operation and fails to resolve it within the given cure period.

This reversion to the original Franchise Agreement terms could significantly impact a franchisee's financial obligations. The Addendum provides for reduced fees, so its termination would result in higher royalty and advertising fees, potentially affecting profitability. Therefore, it is crucial for franchisees to adhere to the terms of the Addendum and the Franchise Agreement to avoid termination and the subsequent increase in fees.