$204

Business Description

HR is offering, in connection with this disclosure document, the opportunity to purchase a franchise to operate one or more Hardee’s Restaurants or Dual Concept Restaurants. The franchise described in this disclosure document is offered only to those of our existing franchisees who were franchisees of HR’s predecessor as of February 6, 1998 and who satisfy the following criteria: (1) during the 12 months preceding receipt of a disclosure document by the franchisee, the franchisee has not been in default of any agreement with HR and currently is in good standing with HR; (2) the franchisee is not in a workout or restructuring relationship with HR; and (3) the franchisee has fully repaid to HR in cash all monies borrowed from or owed to HR. HR offers franchises to all others who do not satisfy the above criteria under a separate disclosure document and separate registration. That offer is on terms and conditions different from those described in this disclosure document. Unless otherwise noted, the disclosures in this disclosure document apply to both Hardee’s Restaurant franchises and Dual Concept Restaurant franchises. In addition, HR offers franchises to operate Hardee’s Restaurants and Dual Concept Restaurants at nontraditional locations under a separate disclosure document and separate registration. That offer is on terms and conditions different from those described in this disclosure document. Nontraditional locations include, but are not limited to, airports, train stations, bus stations, travel plazas, stadiums, arenas, convention centers, military facilities, schools, colleges, universities, hospitals, recreational theme parks, business or industrial foodservice venues, venues in which foodservice is or may be provided by a master concessionaire or contract foodservice provider, Indian reservations, casinos or any similar captive market location.

Prior Experience

HR is a Delaware limited liability company organized on January 30, 2013. HR’s principal place of business is 6700 Tower Circle, Suite 1000, Franklin, Tennessee 37067. HR’s agents for service of process in various states are listed in Exhibit B. We do business under the name “Hardee’s” and the name “Red Burrito” in conjunction with the “Hardee’s” name. We have operated, and offered franchises for, Hardee’s Restaurants and Dual Concept Restaurants since April 1, 2013. As of January 31, 2018, there were 119 company-operated Hardee’s Restaurants, including 6 company-operated Dual Concept Restaurants, and there were 1,745 domestic franchised Hardee’s Restaurants, including 395 Dual Concept Restaurants. In addition, as of January 31, 2018, there were the following international franchised Hardee’s Restaurants: Bahrain – 17; Egypt – 41; Iraq – 6; Jordan – 7; Kazakhstan – 14; Kenya – 2; Kuwait – 53; Lebanon – 6; Oman – 11; Pakistan – 17; Palestine – 1; Qatar – 15; Saudi Arabia – 125; and United Arab Emirates – 62. HR also has operated one Roy Rogers Restaurant since April 1, 2013. We do not engage in any other business or offer franchises in any other line of business. Our predecessor is Hardee’s Food Systems, Inc., a North Carolina corporation incorporated on December 7, 1960, whose principal place of business was 100 N. Broadway, Suite 1200, St. Louis, Missouri 63102-2706. On March 26, 2013, it was converted from a corporation to a limited liability company, Hardee’s Food Systems LLC, a Delaware limited liability company formed on February 25, 2013. Effective October 7, 2013, Hardee’s Food Systems LLC was converted to a North Carolina limited liability company. Hardee’s Food Systems LLC has the same principal place of business as ours. (Hardee’s Food Systems, Inc. and Hardee’s Food Systems LLC will be collectively referred to in this disclosure document as “HFS.”) HFS operated Hardee’s Restaurants from 1960 until March 31, 2013 and Dual Concept Restaurants from 2005 until March 31, 2013. HFS also offered franchises for Hardee’s Restaurants from 1961 until March 31, 2013 and for Dual Concept Restaurants from April 2006 until March 31, 2013. HFS sold franchises for Roy Rogers Restaurants for a portion of the period between April 13, 1990 and July 15, 1997 and operated Roy Rogers Restaurants from April 13, 1990 until March 31, 2013. HFS has not engaged in any other business or offered franchises in any other line of business.

Business Offered

Hardee’s Restaurants are quick service restaurants offering a limited menu of breakfast, lunch and dinner products. The restaurants feature charbroiled 100% Black Angus Thickburger sandwiches, Hand-Breaded Chicken Tenders, Made from Scratch Biscuits and other related quick serve menu items. Dual Concept Restaurants are quick service Hardee’s Restaurants that also incorporate the Red Burrito Dual Concept System. In addition to Hardee’s breakfast, lunch and dinner products, Dual Concept Restaurants offer certain Red Burrito Mexican food products. HR is a party to an agreement with its affiliate, Carl’s Jr. Restaurants LLC (“CJR”), regarding the Red Burrito Dual Concept System. Under that agreement, HR assumes all rights and obligations as franchisor for Dual Concept Restaurants and the Red Burrito Dual Concept System. You must comply with all local, state and federal laws and regulations applicable to the operation of your Hardee’s Restaurant, including health, sanitation, food handling, food preparation, waste disposal, smoking restrictions and advertising and point-of-sale disclosures, including statements concerning the nutritional and dietary characteristics of the food served at your Restaurant. There are other laws and regulations applicable to businesses generally (including the Americans with Disabilities Act) with which you must comply. You should consult with your attorney concerning all laws and regulations that may affect your Restaurant operations. In addition, all newly-developed Hardee’s Restaurants and Dual Concept Restaurants must contain a charbroiler. The charbroiler has been the object of regulation in certain areas of the country, including California where, in some regions, chain-driven charbroilers must have catalytic converters. The possibility exists that other states may require that air pollution control equipment be installed in connection with the use of a charbroiler. You would be expected to comply with these regulations, if applicable to your Restaurant, and pay all costs of installation and maintenance of the control equipment. The restaurant business, including the quick service segment, is highly competitive. You will be competing with other quick service restaurants, including national and regional restaurant chains, fast-casual restaurants, full-service casual-dining restaurants, budget restaurants, health and nutrition-oriented restaurants, delicatessens and prepared food restaurants, take-out food service companies, supermarkets, coffee shops and convenience stores. If you will be operating a Dual Concept Restaurant, you also will be competing with national, regional and local Mexican quick service restaurants. The ability of each Hardee’s Restaurant and each Dual Concept Restaurant to compete depends on its location, ingress and egress, signage, parking, service, employee attitudes, overhead, changing local market and economic conditions, and many other factors both within and outside your control.

Initial Fees

Development Fee If you enter into a Development Agreement, you must pay HR a Development Fee of $10,000 for each Franchised Restaurant you agree to develop at the time you sign the Agreement. The Development Fee is not refundable and is not credited against any other fees paid to HR. With respect to each Franchised Restaurant developed under the Development Agreement, you will execute the form of “St. Louis” Commitment Agreement in use at the time that we accept a site for the Franchised Restaurant and the form of “St. Louis” Franchise Agreement and, if applicable, Dual Concept Franchise Agreement in use at the time immediately prior to your commencing construction of the Franchised Restaurant. Commitment Fee Unless the Franchised Restaurant is developed under a Development Agreement, you must pay HR a Commitment Fee of $10,000 when you sign the Commitment Agreement. The Commitment Fee is not refundable, unless one of the following circumstances apply: we do not accept (in writing) a site for your Franchised Restaurant within 6 months after the Commitment Agreement is signed, or the Franchised Restaurant does not open to the public by the agreed-upon opening date due to a natural disaster, act of God or other force majeure. If either of these circumstances apply, HR will refund the Commitment Fee less all reasonable expenses incurred by HR (as determined by HR in its sole discretion). The Commitment Fee is credited against the Initial Franchise Fee in the circumstances discussed below. Initial Franchise Fee You must pay HR the Initial Franchise Fee, less any Commitment Fee already paid, prior to your commencing construction of the Franchised Restaurant. The Initial Franchise Fee is fully earned by HR when paid, and it is not refundable. The Initial Franchise Fee is generally $35,000; however, it may be reduced, as discussed below. The Red Burrito portion of the Initial Franchise Fee may be waived under the Dual Concept Restaurant Development Incentive Program as described below. Development Incentive Programs We have established two programs that we refer to as Development Incentive Programs to encourage franchisees to develop and open new franchised Hardee’s and Dual Concept Restaurants. Hardee’s Restaurant Development Incentive Program If you open a newly-constructed Hardee’s Restaurant at a traditional location accepted by HR (including the relocation of an existing franchised Hardee’s Restaurant and the rebuild of a franchised Hardee’s Restaurant at an existing location) by no later than January 28, 2019, you and the applicable Franchised Restaurant qualify for our Hardee’s Restaurant Development Incentive Program. Under the Hardee’s Restaurant Development Incentive Program, we will: (a) reduce the amount of the applicable Initial Franchise Fee for the applicable Franchised Restaurant by $10,000 (except in the case of a relocation/rebuild where no Initial Franchise Fee was paid in connection with the Franchise Agreement); (b) with respect to Gross Sales accruing during the applicable Franchised Restaurant’s first year of operation under the Franchise Agreement, reduce the royalty fee by 2% of Gross Sales and reduce the APO by 3.5% of Gross Sales; and (c) with respect to Gross Sales accruing during the applicable Franchised Restaurant’s second year of operation under the Franchise Agreement, reduce the royalty fee by 1% of Gross Sales and reduce the APO by 3% of Gross Sales. In addition, with respect to a qualifying relocation or rebuild of an existing Franchised Restaurant, if the remaining initial term of the applicable Franchise Agreement is less than 20 years, we will add 10 years to the remaining initial term (but not to exceed a total initial term of 20 years), without the payment of any additional Initial Franchise Fee. (For example, if you relocate/rebuild a Franchised Restaurant and, at the time of the relocation/rebuild, there are 7 years left on the initial term, we will add 10 years, resulting in a remaining initial term of 17 years.) If you qualify for the Hardee’s Restaurant Development Incentive Program, simultaneously with your execution of the applicable Franchise Agreement, you will sign a Development Incentive Program Addendum to the Franchise Agreement (Exhibit P), which memorializes your right to receive the development incentives described above for the applicable Franchised Restaurant. Under the Hardee’s Restaurant Development Incentive Program, if you (1) fail to open the applicable Franchised Restaurant by the required opening date set forth in the Development Agreement or the Commitment Agreement, as applicable, or as otherwise required by us; (2) fail to open the applicable Franchised Restaurant by January 28, 2019; or (3) or any of your affiliates receive, during the first two years of operation of the Franchised Restaurant, a written notice of default under any agreement between you or any of your affiliates and us or any of our affiliates and fails to cure the default within the applicable cure period, if any, the Development Incentive Program Addendum will terminate, and you must begin paying the royalty and APO set forth in the applicable Franchise Agreement prior to the execution of the Addendum. In addition, if the Addendum is terminated under (1) or (2) above, you must pay us $10,000, representing the reduction in the Initial Franchise Fee. If you sign the Development Incentive Program Addendum to Franchise Agreement, you will not be entitled, with respect to the applicable Franchised Restaurant, to any other incentives for a Hardee’s Restaurant that have been or may be offered by us. Dual Concept Restaurant Development Incentive Program We have established a Development Incentive Program to encourage franchisees to develop and open new Dual Concept Restaurants and to convert Hardee’s Restaurants to Dual Concept Restaurants. Under the Dual Concept Restaurant Development Incentive Program, HR will waive the Red Burrito portion of the Initial Franchise Fee (“Dual Concept Development Incentive”) if: (1) you develop a new Dual Concept Restaurant, and the construction begins prior to December 31, 2018; or (2) you convert an existing Hardee’s Restaurant to a Dual Concept Restaurant, and the conversion is completed and the Dual Concept Restaurant is opened prior to December 31, 2018. When you sign the Dual Concept Franchise Agreement, you also will sign a Development Incentive Program Addendum to the Dual Concept Franchise Agreement (the current form is attached as Exhibit H), which memorializes your right to receive the Dual Concept Development Incentive. The Dual Concept Development Incentive will terminate following written notice to you, and you will be required to pay to HR the Red Burrito portion of the Initial Franchise Fee waived by HR, if: (1) you fail to commence construction of the proposed Dual Concept Restaurant by December 31, 2018 (or, in the case of a qualifying conversion, you fail to complete the conversion and open the proposed Dual Concept Restaurant by December 31, 2018); or (2) you receive, before the Dual Concept Restaurant has been open for business for 3 years as a Dual Concept Restaurant, a written notice of default under any agreement with HR or its affiliates and fail to cure the default within the applicable cure period, if any. Training Fees Additional Franchise Management Training Program (“FMTP”) HR currently provides the FMTP to you, your Operating Principal (if not previously trained), your General Manager and 6 other employees whom you have hired as Shift Leaders, at no additional cost to you, provided that the training takes place within 2 years of your signing the Franchise Agreement. We reserve, however, the right to modify or waive the training required based on an individual’s or your experience. If HR has provided the FMTP to those individuals, and you desire that additional employees attend the FMTP, they may do so, subject to space availability and your payment of a nonrefundable Training Fee. The Training Fee for each additional employee is $500 per person per week. Notwithstanding the foregoing, you will not be required to pay HR a Training Fee for any person attending the FMTP unless, in any 12-month period, the number of personnel with a designated position title whom you send to the FMTP exceeds the average attrition rate (for quick service restaurants) for that designated position title. In that instance, we may charge you a Training Fee for each person with that designated position title attending the FMTP until the number of personnel with that designated position title whom you send to the FMTP in a 12-month period is no more than the average attrition rate (for quick service restaurants) for that designated position title. You must pay all travel, living and other expenses incurred by you and your employees while attending the FMTP. All-Star Opening Training Support Team (“Opening Training Support Team”) You will be required to pay us, at our discretion, a nonrefundable Opening Training Support Team Fee of up to $10,000 in connection with the opening of your Franchised Restaurant. The Opening Training Support Team Fee must be paid in full at least 7 days prior to the opening of the Franchised Restaurant. The Opening Training Support Team Fee entitles you to opening assistance support by the Opening Training Support Team. We will determine, in our sole discretion, the level of support for your Franchised Restaurant. We reserve the right, in our sole discretion, to modify the level of assistance provided by the Opening Training Support Team. * * * The preceding fees are uniform. HR, in its sole discretion, may modify the Hardee’s Restaurant Development Incentive Program and/or the Dual Concept Development Incentive Program and/or offer different incentives to a specific franchisee under certain circumstances, which may include where a franchisee agrees to develop a significant number of Franchised Restaurants, a franchisee agrees to significantly accelerate his historical development patterns, a franchisee agrees to develop Dual Concept Restaurants or convert existing Hardee’s Restaurants to Dual Concept Restaurants, a franchisee agrees to develop Franchised Restaurants in a new territory, a franchisee proposes to develop unique sites or a franchisee desires to rebuild its franchised restaurant at the current site. In those circumstances, among others as determined by us, HR may, among other things, waive some or all of the Initial Franchise Fee, decrease the royalty fee for a period of time and/or extend the time for a franchisee to comply with its remodel obligations for some or all of its existing Franchised Restaurants. Payments for Goods and Services You must purchase certain inventory and supplies from approved manufacturers, distributors, vendors and suppliers (collectively “suppliers”) before the opening of the Franchised Restaurant. Our affiliate, HED, is an approved supplier. Item 7 provides information regarding the initial purchase of equipment, inventory and supplies from HED and other suppliers. The costs you incur may vary depending, in part, on the amounts purchased, the type of inventory and equipment ordered, state and local taxes imposed and shipping costs.

Financing

Neither we nor any of our agents or affiliates offer direct or indirect financing to you, guarantee any of your notes, leases or obligations, or have any practice or intent of selling, assigning or discounting to a third party all or any part of any of your financing arrangements.

Franchisee Revenue and Profit

Some restaurants have earned these amounts. Your individual results may differ. There is no assurance that you will earn as much. The information contained in this Item 19 should not be considered to be the actual or probable sales and expenses that you will realize. Performance varies from restaurant to restaurant and the information above cannot be used to make estimates related to future performance of any particular restaurant. Your performance will be significantly impacted by your personal business, marketing and management skills, your financial investment capabilities, and your willingness to work hard and follow the Hardee’s System. Many factors that may significantly impact financial performance are unique to each restaurant, including location, physical size and layout, market penetration, local market conditions and other factors. If you are purchasing the assets of existing Company-Operated Restaurants, you should not rely on the information set forth above, but should instead review the actual performance of the Company-Operated Restaurants being purchased. Written substantiation of the financial performance representation will be made available to you upon reasonable request. However, we will disclose the identity, revenue or other items of income or expense of any particular Company-Operated Restaurant only in connection with the sale of that CompanyOperated Restaurant. You are responsible for developing your own business plan for your Franchised Restaurant, including capital budgets, financial statements, projections and other elements appropriate to your particular circumstances. We encourage you to consult with your own accounting, business and legal advisors and to make necessary allowances for changes in financial results to income, expenses or both. You should conduct an independent investigation of the costs and expenses you will incur in operating your Franchised Restaurant. Franchisees or former franchisees listed in the disclosure document may be one source of this information. Other than the preceding financial performance representation, we do not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management by contacting William R. Werner, Executive Vice President and General Counsel, Franchising and Corporate Transactions, 6700 Tower Circle, Suite 1000, Franklin, TN 37067, (615) 538-9250, the Federal Trade Commission, and the appropriate state regulatory agencies.