Under what conditions will Hardees allow a Franchised Restaurant sale to count towards the Developer's obligations under the Development Schedule?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
If, during the Development Term, Developer sells a Franchised Restaurant that was developed pursuant to this Agreement, that Franchised Restaurant will continue to be counted as a Franchised Restaurant for the purpose of meeting Developer's obligations under the Development Schedule, provided that the sale has been consented to by HR and only so long as that restaurant continues to be operated pursuant to a franchise agreement with HR or its affiliates.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, a previously developed Franchised Restaurant that is sold by the Developer can still count towards the Developer's obligations under the Development Schedule. This is contingent upon Hardees consenting to the sale. Additionally, the restaurant must continue to be operated under a franchise agreement with Hardees or its affiliates after the sale.
This provision offers some flexibility for developers who may wish to exit a particular location or adjust their portfolio. However, it's important to note that Hardees' consent is required, meaning the franchisor has the right to approve or deny the sale. This ensures that the new operator meets Hardees' standards and will continue to uphold the brand's reputation.
For a prospective Hardees developer, this clause provides a potential exit strategy for a developed location without negatively impacting their overall development obligations. However, developers should carefully consider the implications of selling a location, including potential tax consequences and the need to obtain Hardees' approval.