Under the Hardees Development Agreement, does HR's failure to exercise a power reserved to it constitute a waiver of HR's right to demand exact compliance with the terms of the agreement?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. No failure of HR to exercise any power reserved to it by this Agreement or to insist upon strict compliance by Developer with any obligation or condition hereunder, and no custom or practice of the parties at variance with the terms of this Agreement, shall constitute a waiver of HR's right to demand exact compliance with any of the terms of this Agreement. A waiver by HR of any particular default by Developer shall not affect or impair HR's rights with respect to any subsequent default of the same, similar or different nature, nor shall any delay, forbearance or omission of HR to exercise any power or right arising out of any breach or default by Developer of any of the terms, provisions or covenants of this Agreement affect or impair HR's right to exercise the same, nor shall such constitute a waiver by HR of any right hereunder, or the right to declare any subsequent breach or default and to terminate this Agreement prior to the expiration of the Development Term. Subsequent acceptance by HR of any payments due to it hereunder shall not be deemed to be a waiver by HR of any preceding breach by Developer of any terms, covenants or conditions of this Agreement. HR has entered, and will continue to enter, into agreements with other developers and franchisees. The manner in which HR enforces its rights, and the developers' or franchisees' obligations, under any of those other agreements shall not affect the ability of HR to enforce its rights or Developer's obligations under this Agreement.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the Development Agreement specifies that Hardees's failure to exercise any power it reserves or to insist on strict compliance by the developer does not constitute a waiver of Hardees's right to demand exact compliance with the agreement's terms. This means that even if Hardees does not strictly enforce every single requirement initially, it retains the right to enforce all terms fully in the future.
Furthermore, a waiver by Hardees of a specific default by the developer does not impact Hardees's rights regarding any subsequent defaults, whether they are the same, similar, or different in nature. Any delay, forbearance, or omission by Hardees to exercise a right due to a breach by the developer does not affect Hardees's right to exercise that right later.
Additionally, Hardees's acceptance of payments does not waive any preceding breach by the developer. The FDD also states that Hardees has agreements with other developers and franchisees, and the way Hardees enforces its rights under those agreements does not affect its ability to enforce the rights and obligations under the Development Agreement with a specific developer. This clause is designed to protect Hardees's ability to enforce its agreements consistently, regardless of past leniency or variations in enforcement with other franchisees.