Under what conditions can Hardees terminate the franchise agreement following an inspection?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
HR shall have the right to periodically conduct inspections of the Franchised Restaurant to evaluate Franchisee's compliance with the System and this Agreement. Following each inspection, HR will provide Franchisee an inspection report listing Franchisee's score on the inspection and those conditions at the Franchised Restaurant that must be rectified. If Franchisee fails to achieve a passing score on an inspection, the inspection report shall constitute a notice of default. If Franchisee fails to achieve a passing score on the next inspection (which shall be conducted at least 30 days after Franchisee's receipt of the inspection
report for the prior inspection), HR may terminate this Agreement, without opportunity to cure, by providing Franchisee written notice of termination along with the inspection report.
D. Statutory Limitations
If any valid, applicable law or regulation of a competent governmental authority with jurisdiction over this Agreement requires a notice or cure period prior to termination longer than set forth in this Section, this Agreement will be deemed amended to conform to the minimum notice or cure period required by the applicable law or regulation.
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 conduct periodic inspections of the franchised restaurant to ensure compliance with the Hardees system and the franchise agreement. Following each inspection, Hardees will provide an inspection report detailing the franchisee's score and any conditions that need rectification.
If a Hardees franchisee fails to achieve a passing score on an inspection, this report serves as a notice of default. Should the franchisee fail to achieve a passing score on the subsequent inspection, which will be conducted at least 30 days after the franchisee receives the initial inspection report, Hardees has the right to terminate the franchise agreement.
Importantly, in this scenario, Hardees can terminate the agreement without providing the franchisee an opportunity to cure the deficiencies. Hardees must provide written notice of termination along with the inspection report to the franchisee. However, if any applicable law or regulation requires a longer notice or cure period, the franchise agreement will be amended to conform to the minimum requirements of that law or regulation.