Under what conditions can Hardees terminate the franchise agreement with cause?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| d. Termination by you | Not Applicable | |
| e. Termination by us without | Not Applicable | |
| cause | ||
| f. Termination by us with cause | Section 21 | We may terminate upon default, which includes, but is not limited to, remaining in default beyond any applicable cure period under any agreement with us or our affiliates, including any Development Agreement. |
| g. "Cause" defined-curable defaults | Section 21.B. | You have 10 days to cure monetary defaults. You have 30 days to cure defaults other than those discussed in paragraph h. |
| h. "Cause" defined-non-curable defaults | Sections 21.A., 21.B.(3) & 21.C. | Non-curable defaults include: closure of the Franchised Restaurant for more than 5 days; insolvency; bankruptcy; execution levied on your business or property; foreclosure; material breach of covenants; transfer without our prior written consent; material misrepresentation; falsification of reports; failure to open the Franchised Restaurant within 60 days after opening is authorized; imminent danger to public health or safety; loss of possession of the Franchised Location; felony conviction; breach of any representation or warranty; default beyond cure period under other agreements with HR or its affiliates, under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or with any vendor or supplier to the Franchised Restaurant; default after receipt of 2 or more notices of default within previous 12 months; and receipt of second consecutive failing score on an inspection. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 64–69)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees can terminate the franchise agreement with cause under several conditions, which are categorized as either curable or non-curable defaults.
For curable defaults, Hardees will provide an opportunity for the franchisee to correct the issue. Specifically, a franchisee has 10 days to cure monetary defaults, such as failure to pay royalties or other fees. For other types of defaults, the franchisee has 30 days to resolve the issue. If the franchisee fails to cure the default within the given timeframe, Hardees has grounds for termination.
Non-curable defaults, on the other hand, are more severe and do not require Hardees to provide an opportunity to cure. These include, but are not limited to: closure of the Franchised Restaurant for more than 5 days; insolvency; bankruptcy; execution levied on your business or property; foreclosure; material breach of covenants; transfer without our prior written consent; material misrepresentation; falsification of reports; failure to open the Franchised Restaurant within 60 days after opening is authorized; imminent danger to public health or safety; loss of possession of the Franchised Location; felony conviction; breach of any representation or warranty; default beyond cure period under other agreements with HR or its affiliates, under any real estate or equipment lease or financing instrument relating to the Franchised Restaurant or with any vendor or supplier to the Franchised Restaurant; default after receipt of 2 or more notices of default within previous 12 months; and receipt of second consecutive failing score on an inspection. These non-curable defaults allow Hardees to proceed with immediate termination of the franchise agreement to protect the brand and system standards.