Upon termination of the Hardees Development Agreement, what happens to the limited exclusive rights granted to the Developer in the Development Territory?

According to Hardees's 2025 Franchise Disclosure Document, upon termination of the Development Agreement, the limited exclusive rights granted to the Developer in the Development Territory will terminate. Following this, Hardees retains the right to operate or license others to operate Hardee's Restaurants anywhere within the Development Territory. This means that after the agreement ends, the developer loses their exclusive rights, and Hardees can establish or authorize other franchises in the same area.

This provision is significant for potential Hardees developers as it clarifies the extent and duration of their exclusive rights. The exclusivity is tied to the term of the Development Agreement, and it does not extend beyond the agreement's termination. This creates a risk for the developer, as Hardees could potentially introduce competing franchises in the same territory after the agreement concludes.

It is important to note that this clause does not affect the developer's right to continue operating any Hardees Restaurants that were already open and operating as of the termination date, provided they are under an effective franchise agreement. The termination only impacts the ability to develop new restaurants within the territory. Prospective developers should carefully consider the implications of this clause and factor it into their business planning and investment decisions, especially concerning the long-term potential of their Development Territory.