Under the Hardees franchise agreement, is a franchisee allowed to acquire rights with the intent to generate funds to support any individual or entity engaged in terrorist activity?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that under applicable U.S. law, including, without limitation, Executive Order 13224, signed on September 23, 2001 ("Order"), HR is prohibited from engaging in any transaction with any person engaged in, or with a person aiding any person engaged in, acts of terrorism, as defined in the Order. Accordingly, Franchisee represents and warrants to HR that as of the date of this Agreement, neither Franchisee nor any person holding any ownership interest in Franchisee, controlled by Franchisee, or under common control with Franchisee is designated under the Order as a person with whom business
may not be transacted by HR, and that Franchisee: (1) does not, and hereafter shall not, engage in any terrorist activity; (2) is not affiliated with and does not support any individual or entity engaged in, contemplating, or supporting terrorist activity; and (3) is not acquiring the rights granted under this Franchise Agreement with the intent to generate funds to channel to any individual or entity engaged in, contemplating, or supporting terrorist activity, or to otherwise support or further any terrorist activity.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Hardees Franchise Disclosure Document, a franchisee is explicitly prohibited from acquiring franchise rights with the intent of generating funds to support terrorist activities. The franchise agreement includes a representation and warranty from the franchisee that they will not engage in such activities.
Specifically, the agreement states that the franchisee cannot acquire rights under the agreement with the intention of generating funds to support any individual or entity involved in terrorist activity. This also extends to not being affiliated with or supporting any individual or entity engaged in, contemplating, or supporting terrorist activity.
This provision ensures that Hardees complies with U.S. laws, including Executive Order 13224, which prohibits transactions with individuals or entities engaged in terrorism. This clause protects Hardees from potential legal and reputational risks associated with franchisees who might be involved in such activities.
A prospective Hardees franchisee should understand that this is a serious legal obligation. Any violation of this provision could lead to termination of the franchise agreement and potential legal consequences.