Under what condition is the Hardees development fee credited towards the initial franchise fee?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
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- B. Developer, as requested by HR, shall prepare a development plan for the Development Territory. Among other things, the development plan may identify specific markets or trade areas in the Development Territory in which Developer will develop Franchised Restaurants, the number and type of Franchised Restaurants to be developed and the time periods in which Developer will develop Franchised Restaurants in each market or trade area. If prepared, any failure by Developer to timely comply with the development plan or any material aspect of the development plan shall constitute a material, non-curable breach of this Agreement, permitting HR to terminate this Agreement immediately by giving written notice of terminat
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, a portion of the development fee can be credited towards the initial franchise fee under specific conditions. The Development Fee is $10,000 for each Hardees restaurant the developer agrees to develop in the Development Territory. This fee is paid when the Development Agreement is signed and is considered fully earned by Hardees upon payment, making it non-refundable.
Upon the execution of each Franchise Agreement for a Hardees restaurant, $10,000 of the development fee will be credited against the full Initial Franchise Fee due to Hardees. This means that while the initial development fee is required upfront, it effectively reduces the initial franchise fee when the franchisee moves forward with opening individual Hardees locations.
This arrangement benefits the franchisee by spreading out the initial investment costs. Instead of paying a large initial franchise fee for each location, the franchisee pays a development fee upfront and then receives a credit towards the franchise fee later. However, it's important to note that the development fee is non-refundable, so if the franchisee does not open all the restaurants they initially agreed to develop, they will not receive a refund for the remaining development fees.