Under what condition is a Hardees Developer required to update Appendix C only with respect to changes in ownership interests of members of the Continuity Group?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
The requirements of this Section 8.C. shall apply only to Developer's Continuity Group (defined in Section 8.D.) if, as of the date of the first franchise-related agreement between Developer and HR or one of its affiliates, Developer was a publicly-held entity (i.e., an entity that has a class of securities traded on a recognized securities exchange or quoted on the inter-dealer quotation sheets known as the "pink sheets"). If Developer becomes a publicly-held entity after that date, it shall thereafter be required to update Appendix C only with respect to changes in ownership interests of members of the Continuity Group.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, a Developer is required to update Appendix C only with respect to changes in ownership interests of members of the Continuity Group if the Developer becomes a publicly-held entity after the date of the first franchise-related agreement between the Developer and Hardees or one of its affiliates. Prior to becoming a publicly-held entity, the Developer must furnish Hardees with a list of all holders of a direct or indirect ownership interest in the Developer and their respective percentage interests.
Appendix C of the Hardees Restaurant Development Agreement is titled "Ownership Interests." If the Developer is a business entity, Appendix C provides a list of all holders of direct or indirect equity interest in the Developer and their respective percentage interests.
This requirement ensures that Hardees is aware of the ownership structure of its Developers, particularly those in the Continuity Group, which includes individuals with significant ownership stakes (10% or more). This is especially important for publicly-held entities where ownership can change more frequently.