Under what conditions can CKR terminate the Hardees agreement immediately without further obligation to the franchisee?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Either party may terminate this Agreement by providing 60 days' prior written notice to the other; provided, however, that CKR may terminate this Agreement, without prejudice to any other remedy CKR may have, immediately without further obligation to Franchisee in the event of: (a) any breach by Franchisee of any material provision of this Agreement which breach is not or cannot be remedied within 24 hours of CKR's notice to Franchisee; or (b) any assignment by Franchisee for the benefit of its creditors, the filing under any voluntary bankruptcy or insolvency law, under the reorganization or arrangement provisions of the United States Bankruptcy Code, or under the provisions of any law of like import in connection with Franchisee, or the appointment of a trustee or receiver for Franchisee or its property.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, CKR can terminate the agreement immediately without further obligation to the franchisee under specific circumstances. These circumstances involve breaches of the agreement or financial instability of the franchisee.
Specifically, CKR can terminate the agreement if the franchisee breaches any material provision of the agreement and fails to remedy the breach within 24 hours of receiving notice from CKR. This implies that the breach must be significant enough to warrant immediate action and that the franchisee has a very short window to correct the issue.
Additionally, CKR can terminate the agreement immediately if the franchisee makes an assignment for the benefit of creditors, files for bankruptcy or insolvency, or has a trustee or receiver appointed for their property. These events indicate severe financial distress, which could jeopardize the Hardees brand and its operations. This type of clause is standard in most franchise agreements to protect the franchisor from potential damage due to a franchisee's financial instability.