Under what conditions can Hardees refuse to accept a site for a proposed Hardees Franchised Restaurant?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer acknowledges that, in order to preserve and enhance the reputation and goodwill of all restaurants franchised by HR and the goodwill of the Proprietary Marks, all Franchised Restaurants must be properly developed, operated and maintained. Accordingly, Developer agrees that HR may refuse to accept a site for a proposed Franchised Restaurant unless Developer demonstrates sufficient financial capabilities, in HR's sole judgment, applying standards consistent with criteria HR uses to establish restaurants in other comparable market areas, to properly develop, operate and maintain the proposed Franchised Restaurant. To this end, Developer shall furnish HR with such financial statements and other information regarding Developer (or its Affiliated Entity, as defined in Section 3.E.) and the development and operation of the proposed Franchised Restaurant, including, without limitation, investment and financing plans for the proposed Franchised Restaurant, as HR reasonably may require.
D. Site Acceptance
Within 45 days after receipt of all documents referenced in this Section and any additional information that HR may require, HR shall advise Developer in writing whether it has accepted a particular site; however, HR has no obligation to review any development proposal if Developer or its affiliates are not in full compliance with all agreements with HR or its affiliates and not approved for growth by HR. If HR does not respond within that time period, HR shall be deemed not to have accepted the site. HR's acceptance or refusal to accept a site may be subject to reasonable conditions as determined in its sole discretion. (A site that HR has accepted shall be referred to as an "Authorized Site.")
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, Hardees has the right to refuse a proposed site for a Franchised Restaurant if the developer fails to demonstrate sufficient financial capabilities to properly develop, operate, and maintain the restaurant. This decision is based on Hardees' sole judgment, applying standards consistent with criteria used in comparable market areas. To assess this, Hardees requires the developer to furnish financial statements and other pertinent information regarding their financial standing, as well as investment and financing plans for the proposed restaurant.
Hardees may also refuse a site if the developer or its affiliates are not in full compliance with all existing agreements with Hardees or its affiliates, or if they have not been approved for growth by Hardees. The FDD specifies that Hardees will advise the developer in writing whether it has accepted a particular site within 45 days after receiving all required documents and information. However, if Hardees does not respond within this timeframe, the site is deemed not accepted. Hardees' acceptance or refusal may also be subject to reasonable conditions determined at its discretion.
This process underscores the importance of financial stability and adherence to existing agreements for prospective Hardees franchisees. The evaluation criteria ensure that new locations align with Hardees' standards for development, operation, and maintenance, safeguarding the brand's reputation. The 45-day review period provides a defined timeframe for site approval, although the lack of response within this period implies rejection. The ability of Hardees to impose reasonable conditions on site acceptance provides flexibility in adapting to specific site characteristics and market conditions.