Under what conditions can Hardees terminate the franchise agreement immediately after the cure period expires?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Termination Following Expiration of Cure Period
- (1) Except for those items listed in preceding Section 21.A., Franchisee shall have 30 days after written notice of default from HR within which to remedy the default and provide evidence of that remedy to HR.
If any such default is not cured within that time, this Agreement shall terminate without further notice to Franchisee effective immediately upon expiration of that time, unless HR notifies Franchisee otherwise in writing.
Notwithstanding the foregoing, if the default cannot be corrected within 30 days, Franchisee shall have such additional time to correct the default as reasonably required (not to exceed 90 days), provided that Franchisee begins taking the actions necessary to correct the default during the 30-day cure period and diligently and in good faith pursues those actions to completion.
Franchisee will be in default under this Section 21.B.(1) for any failure to materially comply with any of the requirements imposed by this Agreement, the OPM or otherwise in writing, or to carry out the terms of this Agreement in good faith.
(2) Notwithstanding the provisions of preceding Section 21.B.(1), if Franchisee defaults in the payment of any monies owed to HR or its affiliates when such monies become due and payable and Franchisee fails to pay such monies within 10 days after receiving written notice of default, then this Agreement will terminate effective immediately upon expiration of that time, unless HR notifies Franchisee otherwise in writing.
(3) If Franchisee has received 2 or more notices of default within the previous 12 months, HR shall be entitled to send Franchisee a notice of termination upon Franchisee's next default within that 12-month period under this Section 21.B. without providing Franchisee an opportunity to remedy the default.
(4) In addition to the other provisions of this Section 21.B., if HR reasonably determines that Franchisee becomes or will become unable to meet its obligations to HR or its affiliates under this Agreement, HR may provide Franchisee written notice to that effect and demand that Franchisee provide those assurances reasonably designated by HR, which may include security or letters of credit for the payment of Franchisee's obligations to HR and its affiliates.
If Franchisee fails to provide the assurances demanded by HR within 30 days after its receipt of written notice from HR, this Agreement shall terminate without further notice to Franchisee effective immediately upon expiration of that time, unless HR notifies Franchisee otherwise in writing.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Hardees Franchise Disclosure Document, Hardees can terminate the franchise agreement immediately after the cure period expires under several conditions. If a franchisee fails to remedy a default within 30 days after receiving written notice from Hardees, the agreement can be terminated without further notice. However, if the default cannot be corrected within 30 days, the franchisee has additional time, not exceeding 90 days, provided they begin corrective actions during the initial 30-day period and diligently pursue them.
A critical exception exists for monetary defaults. If a franchisee fails to pay monies owed to Hardees or its affiliates within 10 days after receiving written notice, the agreement can be terminated immediately upon the expiration of that 10-day period, unless Hardees provides written notice otherwise.
Furthermore, Hardees can issue a notice of termination without providing an opportunity to remedy the default if the franchisee has received two or more default notices within the previous 12 months. Additionally, if Hardees reasonably determines that a franchisee is unable to meet its financial obligations, Hardees can demand assurances, such as security or letters of credit, and terminate the agreement if these assurances are not provided within 30 days of the written notice.