Under what conditions will the Hardees reduced royalty and APO program incentives be terminated following written notice to the Franchisee?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3. Termination of Program Incentives. This Addendum and the Program will terminate following written notice to Franchisee if:
- A. Franchisee fails to open the Franchised Restaurant on or before 120 days after the contractual opening date pursuant to the terms of the Franchisee's Development Agreement or Franchise Agreement; or
- B. Franchisee or any affiliate of Franchisee receives, during the first three years of operation of the Franchised Restaurant under the Franchise Agreement, a written notice of default under any agreement between Franchisee or any affiliate of Franchisee and HR or any affiliate of HR and fails to cure the default within the applicable cure period, if any.
- 4. Effect of Termination. If this Addendum is terminated during the first three years of the Franchised Restaurant's operation under the Franchise Agreement, the royalty fee and APO for the Franchised Restaurant will immediately revert to the applicable amounts set forth in the Franchise Agreement.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the reduced royalty and APO program incentives, outlined in the addendum to the franchise agreement, can be terminated under specific conditions following written notice to the franchisee.
The addendum and associated program will be terminated if the Hardees franchisee fails to open the franchised restaurant on or before 120 days after the contractual opening date, as defined in the Development Agreement or Franchise Agreement. This condition emphasizes the importance of adhering to the agreed-upon timeline for opening the restaurant.
Additionally, the incentives will be terminated if the Hardees franchisee, or any of their affiliates, receives a written notice of default under any agreement with Hardee's Restaurants LLC (HR) or its affiliates during the first three years of the restaurant's operation and fails to cure the default within the applicable cure period. This clause highlights the franchisee's responsibility to maintain compliance with all agreements and rectify any defaults promptly to retain the benefits of the incentive program. If the addendum is terminated, the royalty fee and APO for the franchised restaurant will revert to the amounts set forth in the original Franchise Agreement.