Upon termination or expiration of the Development Agreement, does Hardees retain the Development Fee, including any remaining balance on account with HR?

According to Hardees's 2025 Franchise Disclosure Document, Hardees retains the development fee upon termination or expiration of the Development Agreement. This includes any remaining unused balance on account with HR. This means that if a developer's agreement ends, Hardees keeps the initial fee paid, regardless of whether all of it has been used.

For a prospective Hardees developer, this policy has significant financial implications. The development fee is non-refundable, so it's crucial to carefully consider the development schedule and the likelihood of fulfilling the agreement before entering into it. If the developer fails to meet the obligations or decides to terminate the agreement early, they will forfeit the unused portion of the development fee.

This retention of fees is a standard practice in the franchise industry, as it compensates the franchisor for the initial investment in setting up the development agreement, providing training, and allocating territory. However, developers should be aware of this clause and factor it into their financial planning and risk assessment. It is important to have a clear understanding of the terms and conditions under which the development fee is retained to avoid potential financial losses.