Under what circumstances related to legal requirements would the Hardees franchise agreement be amended?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
hree years of operation of the Franchised Restaurant under the Franchise Agreement, a written notice of default under any agreement between Franchisee or any affiliate of Franchisee and HR or any affiliate of HR and fails to cure the default within the applicable cure period, if any.
- 6. Effect of Termination. If this Addendum is terminated the royalty fee and APO for the Franchised Restaurant will immediately revert to the applicable amounts set forth in the Franchise Agreement.
- 7. Capitalized Terms. Any capitalized term that is not defined in this Addendum will have the meaning given it in the Franchise Agreement.
- 8. Limited Modification. Except as expressly modified by this Addendum, the Franchise Agreement remains unmodified and in full force and effect.
[Signatures on following page.]
IN WITNESS WHEREOF, the parties have duly executed, sealed and delivered this Addendum as of the day and year first above written.
HR:
HARDEE'S RESTAURANTS LLC Print Name: Danell Caron Vice President, Legal Print Name:
EXHIBIT 1
Royalty Fee and APO Due (Section 1 of the Addendum):
During the first three years of operation of the Franchised Restaurant, Franchisee will pay HR the following for Royalty and APO:
Royalty Fee:
| Dates of Operation of the Franchised Restaurant | Royalty Fee Percentage of Gross Sales |
|---|---|
| First 12 months | 1.00% |
| Second 12 months | 2.00% |
| Third 12 months | 3.00% |
| Year 4 and beyond | 4.00% |
APO Allocation*:
| APO Allocation by Period | Total APO | HNAF | Regional Co-op | LSM Allocation |
|---|---|---|---|---|
| Year 1: First 12 months | 2.50% | |||
| Year 2: Second 12 months | 3.50% | |||
| Year 3: Third 12 months | 4.50% | |||
| Years 4 and beyond | 5.50% |
*APO allocation is dependent on whether new Franchised Restaurant is located within a DMA that has a regional co-op
TRAVEL CENTER CONVERSION DEVELOPMENT INCENTIVE PROGRAM ADDENDUM
TRAVEL CENTER DEVELOPMENT INCENTIVE PROGRAM ADDENDUM TO THE HARDEE'S RESTAURANT FRANCHISE AGREEMENT
| THIS ADDENDUM to the Hardee's Restaurant Franchise Agreement dated as of, ("Franchise Agreement") between Hardee's Restaurants LLC ("HR") and |
|---|
| ("Franchisee") is entered into simultaneously with the |
| Franchise Agreement. |
| RECITALS |
| A. |
| In order to stimulate the development of new franchised Hardee's Restaurants and the |
| continued expansion of the System at eligible travel center and gas and convenience locations, HR has |
| established the 2025 HR Travel Center Development Incentive Program (the "Travel Center Program"). |
| B. |
| To be eligible for the Travel Center Program, the following requirements must be satisfied: |
| (i) the Hardee's Restaurant must be located at a travel center location or gas and convenience location that |
| is within ½ mile of an interstate or limited access highway and must include a combination of high rise |
| pylon sign, billboard or other highway sign, (ii) the travel center location or gas and convenience location |
| must be opened pursuant to a Development Agreement dated no later than May 24, 2026, (iii) Franchisee |
| must open the Franchise Restaurants from a travel center location or gas and convenience location by the |
| date(s) outlined in the corresponding Development Agreement, (iv) Franchisee may not be in default of its |
| obligations under its existing franchise agreements or related agreements with HR or its affiliates, (v) |
| Franchisee must be approved for growth by HR and its affiliates, (vi) Franchisee must satisfy HR's then |
| current financial and operational requirements for new restaurant development, and (vii) Franchisee and |
| the Hardee's Restaurant(s) otherwise meet the requirements of the Travel Center Program. |
| C. |
| Franchisee and HR are parties to a Development Agreement dated as of, |
| ,. |
| D. |
| Franchisee and the Franchised Restaurant are eligible to participate in the Travel Center |
| Program. |
| E. |
| The Franchised Restaurant opened pursuant to this Franchise Agreement qualifies as a |
| "Conversion Restaurant" as determined by HR. |
| F. |
| Consequently, HR and Franchisee are entering into this Addendum to modify the Franchise |
| Agreement to reflect the Franchisee's participation in the Program incentives. |
| AGREEMENT |
| NOW, THEREFORE, in consideration of the mutual covenants, agreements and obligations set |
| forth below, the parties, intending to be legally bound, agree to amend the Franchise Agreement as follows: |
| 1. |
| Reduced Royalty and APO for Limited Period of Time. Notwithstanding anything to the |
| contrary contained in the Franchise Agreement, HR agrees that the royalty fee to be paid by Franchisee for |
| the Franchised Restaurant will be reduced by: (A) 3% of Gross Sales for Gross Sales accruing during the |
| Franchised Restaurant's first 12 months of operation under the Franchise Agreement; (B) 2% of Gross Sales |
| for Gross Sales accruing during the Franchised Restaurant's second 12 months of operation under the |
| Franchise Agreement; and (C) 1% of Gross Sales for Gross Sales accruing during the Franchised |
Restaurant's third 12 months of operation under the Franchise Agreement. Thereafter and during the remaining Initial Term of the Franchise Agreement, the royalty fee will revert to 5% of Gross Sales. Additionally, the APO fee will be reduced to 2% of Gross Sales during the Initial Term of the Franchise Agreement. The royalty fee and APO to be paid pursuant to this Addendum are set forth in Exhibit 1.
- 2. Initial Franchise Fee. If the Franchised Restaurant opens six (6) months prior to the "Opening Date" identified in the Development Agreement, then HR will waive collection of the remaining $15,000 Initial Franchise Fee.
- 3. Conversion Cash Incentive. If the Franchised Restaurant developed pursuant to this Franchise Agreement qualifies as a "Conversion Restaurant" as determined by HR, and the Franchised Restaurant opens within 12 months of signing the Franchise Agreement, then HR will pay Franchisee a $50,000 cash incentive (the "Cash Incentive"). HR will pay Franchisee the Cash Incentive thirty (30) days after the Franchised Restaurant opens for business.
- 4. Other Development Incentive Programs. Franchisee acknowledges and agrees that, by signing this Addendum, it will not be entitled, with respect to the Franchised Restaurant, to any other incentive that have been or may be offered by HR.
- 5. Termination of Program Incentives. This Addendum and the Program will terminate following written notice to Franchisee if:
- A. Franchisee fails to open the Franchised Restaurant on or before 120 days after the contractual opening date pursuant to the terms of the Franchisee's Development Agreement; or
- B. Franchisee or any affiliate of Franchisee receives, during the first three years of operation of the Franchised Restaurant under the Franchise Agreement, a written notice of default under any agreement between Franchisee or any affiliate of Franchisee and HR or any affiliate of HR and fails to cure the default within the applicable cure period, if any.
- 6. Effect of Termination. If this Addendum is terminated the royalty fee and APO for the Franchised Restaurant will immediately revert to the applicable amounts set forth in the Franchise Agreement.
- 7. Capitalized Terms. Any capitalized term that is not defined in this Addendum will have the meaning given it in the Franchise Agreement.
- 8. Limited Modification. Except as expressly modified by this Addendum, the Franchise Agreement remains unmodified and in full force and effect.
[Signatures on following page.]
IN WITNESS WHEREOF, the parties have duly executed, sealed and delivered this Addendum as of the day and year first above written.
HR:
HARDEE'S RESTAURANTS LLC Print Name: Danell Caron Vice President, Legal Print Name:
EXHIBIT 1
Royalty Fee and APO Due (Section 1 of the Addendum):
During the first three years of operation of the Franchised Restaurant, Franchisee will pay HR the following for Royalty and APO:
Royalty Fee:
| Dates of Operation of the Franchised Restaurant | Royalty Fee Percentage of Gross Sales |
|---|---|
| First 12 months | 1.00% |
| Second 12 months | 2.00% |
| Third 12 months | 3.00% |
| Year 4 and beyond | 5.00% |
APO Allocation*:
| APO Allocation by Period | Total APO | HNAF | Regional Co-op | LSM Allocation |
|---|---|---|---|---|
| Initial Term | 2.00% |
*APO allocation is dependent on whether new Franchised Restaurant is located within a DMA that has a regional co-op
TRAVEL CENTER DEVELOPMENT INCENTIVE PROGRAM ADDENDUM
3 TO 9 OBLIGATIONS
TRAVEL CENTER DEVELOPMENT INCENTIVE PROGRAM ADDENDUM TO THE HARDEE'S RESTAURANT FRANCHISE AGREEMENT
| Agreement") | between | Hardee's | Restaurants | LLC | ("HR") | and | |
|---|---|---|---|---|---|---|---|
| ("Franchise | ("Franchisee") is entered into simultaneously with the | ||||||
| Franchise Agreement. |
RECITALS
- A.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the franchise agreement may be amended through an addendum to reflect a franchisee's participation in specific incentive programs. These programs aim to encourage the development of new Hardees restaurants, particularly at travel centers, gas stations, and convenience store locations.
For instance, the 2025 HR Travel Center Development Incentive Program provides incentives for franchisees opening Hardees restaurants at eligible travel center and gas/convenience locations. To qualify, the location must be near an interstate or limited-access highway and include prominent signage. The location must be opened under a Development Agreement dated no later than May 24, 2026, and the franchisee must meet specific operational, financial, and growth criteria set by Hardees. The franchisee also cannot be in default of any existing agreements with Hardees.
Similarly, the 2025 HR Development Incentive Program for Conversion Restaurants offers incentives for converting existing locations into Hardees restaurants. The eligibility requirements mirror those of the Travel Center Program, emphasizing the location's proximity to highways, adherence to the Development Agreement timeline, and the franchisee's good standing with Hardees. If a franchisee and their restaurant meet these requirements and are deemed eligible for either the Travel Center Program or the Conversion Restaurant Program, Hardees will enter into an addendum to the franchise agreement. This addendum modifies the agreement to reflect the franchisee's participation in the program and outlines the specific incentives they will receive, such as reduced royalty fees.