Under what conditions can Hardees exclude assets from the purchase when exercising its option?

According to Hardees's 2025 Franchise Disclosure Document, when Hardees exercises its option to purchase assets from a franchisee, it can exclude certain assets under specific conditions. Hardees may exclude any equipment, vehicles, furnishings, fixtures, signs, and inventory that do not meet the current standards for a Hardee's restaurant. This means that if the franchisee has not maintained these assets to the required standards, Hardees is not obligated to purchase them.

Additionally, Hardees can exclude assets if the franchisee cannot provide a Bill of Sale in a form satisfactory to Hardees. This implies that proper documentation of ownership and transfer rights is essential for the assets to be included in the purchase. If the franchisee fails to provide the necessary documentation, Hardees can choose not to buy those assets.

These conditions protect Hardees by ensuring that it only acquires assets that meet its brand standards and have clear ownership. For a prospective franchisee, this highlights the importance of maintaining assets to Hardees' standards and keeping accurate records of ownership to avoid potential issues during the sale of the franchise.