Under what conditions can Hardees reduce the scope of a covenant in Section 20?
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 20 effective immediately upon Franchisee's receipt of written notice, and Franchisee agrees that it shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Section 29.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees has the right to reduce the scope of any covenant in Section 20. This modification can be made at Hardees's sole discretion.
For a prospective franchisee, this means that Hardees can change the terms of the covenants outlined in Section 20 of the franchise agreement. These changes become effective immediately once the franchisee receives written notice from Hardees. The franchisee is then obligated to comply with the modified covenant, regardless of the provisions in Section 29 of the agreement.
This clause gives Hardees significant flexibility to adjust the restrictions placed on franchisees during and after the term of the agreement. Franchisees should be aware that these covenants, which often relate to competitive activities and confidentiality, can be altered by Hardees at any time with written notice. This could impact a franchisee's future business opportunities or operations, so it's important to fully understand the implications of Section 20 and how it might be modified.