Under what condition related to assignment/transfer or renewal will the general release NOT apply for a Hardees franchise?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Items 5 and 7, Additional Disclosures. The following statement is added to Items 5 and 7:
Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the development agreement opens.
Item 17, Additional Disclosures. The following statements are added to Item 17:
The general release required as a condition of assignment/transfer or renewal shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 71–84)
What This Means (2025 FDD)
According to the 2025 Hardees Franchise Disclosure Document, there are specific conditions under which the general release required during assignment, transfer, or renewal of a franchise will not apply, particularly for franchisees in Maryland and North Dakota.
For Maryland franchisees, the general release will not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This means that even if a franchisee signs a general release upon transferring their franchise or renewing their agreement, they still retain the right to pursue claims against Hardees under Maryland's franchise laws. This provision protects franchisees' rights under state law, ensuring they do not inadvertently waive their legal protections when exiting or renewing their franchise agreement.
Similarly, for franchisees in North Dakota, any general release required is not intended to act as a release, estoppel, or waiver of any liability Hardees may have incurred under the North Dakota Franchise Investment Law. This ensures that North Dakota franchisees maintain their rights and protections under the state's franchise investment law, even when signing a general release. This addendum reflects a commitment to compliance with state-specific franchise regulations and aims to protect franchisees from unintentionally relinquishing their legal rights.