Hardee's Traditional Franchise

Financing Details

Hardee's Restaurants LLC does not offer any direct or indirect financing to franchisees, nor does it guarantee any franchisee notes, leases, or other obligations. If a franchisee purchases an existing company-operated Hardee's Restaurant, Hardee's Restaurants LLC will issue a sublease for the site; however, this sublease does not contain any financing terms. Franchisees must arrange their own funding.

Litigation Summary

Hardee's Restaurants LLC (HR) and its affiliates have disclosed several past litigation matters. One significant case involving an affiliate, Carl's Jr. Restaurants LLC (CJR), was with 6Points Food Services Ltd. This lawsuit, filed in 2015, alleged deficient franchise disclosures and breach of fair dealing, and was settled in October 2022 for $5,500,000 USD, with no admission of liability. Two other cases against CJR in 2018 and 2019 involved allegations of anti-trust violations related to non-solicitation/no-hire provisions in franchise agreements. These were settled in April 2019 with CJR agreeing to pay small sums and amend relevant franchise agreements for Washington and Colorado franchisees. Additionally, Hardee's affiliates Arby's Restaurant Group, Inc. and Dunkin' Brands, Inc. settled with various state Attorneys General in 2019 over similar "no-poaching" provisions, agreeing to remove/not enforce such clauses without monetary payments from Arby's, and Dunkin' Brands denying liability. Another case against Dunkin' Brands, Inc., filed in 2019, concerned data security breaches; this was settled in 2020 with Dunkin' Brands agreeing to pay $650,000 in penalties and costs and maintaining a security program.

Renewal Conditions

To renew their franchise agreement, Hardee's Restaurants franchisees must provide written notice 12 to 24 months before the initial term expires. Conditions for renewal include being in good standing, not being in default under any agreements with Hardee's Restaurants LLC or its affiliates, complying with all training requirements, making necessary capital expenditures to renovate and modernize the restaurant to current brand image, demonstrating the right to possess the location for the renewal term, and paying a renewal fee of $5,000 for a 5-year term or $10,000 for a term greater than 5 but no more than 10 years. Franchisees will also need to sign the then-current franchise agreement, which may have different terms regarding royalty fees and advertising obligations, and execute a general release of claims.

Staffing Notes

Hardee's Restaurants LLC requires that each franchised restaurant always be supervised on-site by a designated individual, such as the Operating Principal, a Multi-Unit Manager, or a General Manager, who meets the franchisor's training qualifications. Franchisees must employ at least one General Manager and a sufficient number of employees who have successfully completed the Franchise Management Training Program (FMTP) to ensure the restaurant operates according to the Hardee's System. If the number of trained personnel falls below the requirement, the franchisee has 30 days to hire and enroll replacements in the FMTP. Franchisees are solely responsible for hiring, training, supervising, compensating, and terminating their employees. All staff must be competent, courteous, and adhere to Hardee's Restaurants LLC's dress, appearance, and hygiene standards. The Operating Principal or Multi-Unit Manager is expected to actively oversee operations, including regular visits and communication with Hardee's Restaurants LLC.