Under what circumstances are Hardees franchise fees forfeited and recognized as revenue?

According to Hardees's 2025 Franchise Disclosure Document, franchise fees are forfeited and recognized as revenue under specific circumstances. These circumstances include the termination of commitments to open new franchised Hardees restaurants, the closure of franchised restaurants before the end of their contractual agreement, or the acquisition of franchised restaurants by the company itself.

In practical terms, this means that if a franchisee's agreement to open a new Hardees location is terminated for any reason, Hardees can recognize the franchise fees associated with that location as revenue. Similarly, if a Hardees restaurant closes its doors before the franchise agreement expires, or if Hardees buys back a franchised location, the initial franchise fees for those locations are then recognized as revenue.

This policy is important for prospective franchisees to understand because it clarifies when Hardees recognizes revenue from franchise fees. It also highlights the potential financial implications for both the franchisor and franchisee in the event of early termination, closure, or acquisition of a Hardees franchise. Franchisees should carefully consider these factors and seek legal and financial advice to fully understand the terms and conditions of the franchise agreement.