Under what circumstances is Hardees allowed to request extensive structural changes, major remodeling and renovations, and substantial modifications to existing equipment and improvements to modernize and conform the Franchised Restaurant to the image of the System?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Extensive structural changes, major remodeling and renovations, and substantial modifications to existing equipment and improvements to modernize and conform the Franchised Restaurant to the image of the System for new franchised and company restaurants shall be required: (i) as a condition of renewal, (ii) as a condition of HR issuing its consent to a proposed transfer as defined further in Section 18 below, or (iii) at HR's request (but not more often than every 5 years). Capital expenses necessary for the repair and maintenance of the Franchised Location and modifications required by applicable law or required to abate a hazardous situation are not subject to the time limitations described in the preceding sentence. Within 60 days after receipt of HR's written notice regarding the required modernization, Franchisee shall prepare and complete drawings and plans, along with a project timeline, for the required modernization. These drawings and plans must be submitted to, and their use approved by, HR prior to the commencement of work. Franchisee shall complete the required modernization within the time reasonably specified by HR in its written notice.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees can require extensive structural changes, major remodeling and renovations, and substantial modifications to existing equipment and improvements to modernize and conform the Franchised Restaurant to the image of the System under specific circumstances. These circumstances include when it is a condition of renewal, a condition of Hardees issuing consent to a proposed transfer, or at Hardees' request, but not more often than every 5 years for new franchised and company restaurants.
This means that as a Hardees franchisee, you may be required to undertake significant and potentially costly upgrades to your restaurant to maintain brand standards. These upgrades can be mandated as part of your franchise renewal process, if you decide to sell or transfer your franchise, or periodically at Hardees' discretion, with a maximum frequency of once every five years.
However, the FDD also specifies that capital expenses for the repair and maintenance of the Franchised Location, modifications required by applicable law, or those needed to abate a hazardous situation are not subject to the five-year limitation. Franchisees are required to prepare and complete drawings and plans, along with a project timeline, for the required modernization within 60 days after receipt of Hardees' written notice. These plans must be submitted to and approved by Hardees before work begins, and the modernization must be completed within the timeframe specified by Hardees in its written notice. This ensures that Hardees maintains control over the brand's image and standards, while also placing the financial burden of these updates on the franchisee.