Under what conditions can HR modify the covenants in Section 12 for Hardees franchisees?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
HR shall have the right, in its sole discretion, to reduce the scope of any covenant in this Section 12 effective immediately upon Developer's receipt of written notice, and Developer agrees that it shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Section 20.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, HR (presumably Hardees Restaurants LLC) has the right to modify the covenants in Section 12. HR has sole discretion to reduce the scope of any covenant within Section 12. This modification becomes effective immediately once the developer (franchisee) receives written notice from HR. The franchisee must then comply with the modified covenant.
This means that Hardees retains significant control over the covenants outlined in Section 12 and can alter them at any time during the agreement. The franchisee is obligated to adhere to these changes promptly upon notification. This could impact the franchisee's operations, potentially requiring them to adjust their business practices to align with the modified covenants.
Prospective Hardees franchisees should carefully review Section 12 of the franchise agreement to understand the full scope of the covenants and the potential implications of HR's ability to modify them. Franchisees should also seek legal counsel to fully understand their rights and obligations in the event of such modifications. This level of franchisor control is not uncommon, but franchisees need to be aware of the potential for unilateral changes to the agreement.