Under what circumstances can HR operate or license others to operate Hardee's Restaurants in the Development Territory within travel plazas, gas stations, or convenience stores?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
The Hardee's System (including the products sold under the Proprietary Marks) have been developed, and are designed, to function effectively in a wide variety of retail environments, many of which are not practically available to Developer. Accordingly, HR reserves to itself the rights to: (A) operate and license others to operate Hardee's Restaurants in the Development Territory that are located in travel plazas, gas stations or convenience stores; (B) operate, and license others to operate, Hardee's Restaurants in the Development Territory that are located in airports, train stations, bus stations, toll plazas, stadiums, arenas, convention centers, military facilities, schools, colleges, universities, hospitals, recreational theme parks, business or industrial foodservice venues, venues in which foodservice is or may be provided by a master concessionaire or contract foodservice provider, Indian reservations, casinos, "ghost" or "dark" kitchens or any similar captive or non-traditional "brick and mortar" locations; (C) award national or regional licenses to third parties to sell products under the Proprietary Marks in foodservice facilities primarily identified by the third party's trademark; (D) develop and operate, and license others to develop and operate, restaurants other than Hardee's Restaurants in the Development Territory; (E) merchandise and distribute products identified by some or all of the Proprietary Marks in the Development Territory through any other method or channel of distribution; and (F) sell and distribute products identified by some or all of the Proprietary Marks in the Development Territory to restaurants other than Hardee's Restaurants, provided those restaurants are not licensed to use the Proprietary Marks in connection with their retail sales.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardee's 2025 Franchise Disclosure Document, HR (the franchisor) reserves specific rights regarding the operation and licensing of Hardee's restaurants within a Development Territory. Even with a development agreement in place, Hardee's retains the right to operate or license others to operate Hardee's restaurants in travel plazas, gas stations, or convenience stores within the developer's territory. This means that even if a developer has an agreement for a specific area, Hardee's can still establish locations in these specific types of venues.
This reservation of rights has significant implications for potential developers. It means that the exclusive rights granted to a developer are limited, and Hardee's can directly compete within the developer's territory in certain locations. This could impact the developer's potential revenue and market share. The developer needs to be aware that Hardee's could strategically place restaurants in high-traffic areas like travel plazas and gas stations, which might otherwise have been prime locations for the developer's own franchised restaurants.
Furthermore, Hardee's also reserves the right to operate and license restaurants in other non-traditional locations such as airports, train stations, military facilities, and theme parks. They can also award national or regional licenses to third parties to sell products under Hardee's trademarks in foodservice facilities primarily identified by the third party's trademark. These broad exceptions to the developer's exclusive rights highlight the importance of carefully evaluating the potential impact of these competitive channels when considering a Hardee's development agreement.
Prospective developers should carefully consider these limitations and assess the potential impact on their investment. It would be prudent to discuss with Hardee's their specific plans for these non-traditional locations within the Development Territory and to understand the potential for competition from these channels. Understanding the franchisor's strategy for these alternative venues is crucial for making an informed decision about investing in a Hardee's development agreement.