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Unhappy Franchisee Blames “Lewd” Advertisements, consumer shifting towards healthy options, and Low ROI as primary reasons for not investing in Hardee’s Franchise.
Hardee’s has more than 1500 franchise locations in 30 states of the U.S. The franchise owner can choose the franchise available as free-standing, end-caps, conversions, non-traditional.
Hardee’s has recently introduced future flexible restaurant design enhancing drive-thru, delivery dining model,on-premise dining for their customers. In addition, it turns out to be an expensive affair for franchise owners adding up to the construction cost to a total investment of more than $2,000,000.
Hardee’s and their sister concern Carl jr are a famous fast-food chain owned primarily by CKE restaurants and Inc, located in the Southern and midwestern United States. The brand is known mainly in the QSR industry for its MADE-FROM-SCRATCH BISCUITS AND Juicy burgers. Also, their regular innovation to the menu makes it exciting and alluring to their customers. The restaurant chain has been successfully working since the 1960s and has expanded its market worldwide.
With so many upfront costs and ongoing fees like royalty, it’s no wonder that the idea of opening a franchise deters start-ups. Today, franchisees not only pay the location fee, but they also have to pay an enormous more than $45,000 fee for the right to operate the business for 20 years.
Buying a franchise can lead to success, but there are many factors to consider before jumping in.
Fransmart helps you to make the right decision on franchise opportunities. After researching the food industry, market trends, analyzing competitors like McDonald’s, Burger King, Jersey Mike’s, KFC, Tacos bells, reviewing Hardee’s company policies, and FDD, we concluded some of the shortcomings of the Hardee’s Franchise opportunity.
Reasons why you should give it a thought before buying a Hardee’s Franchise-
Although the Hardee franchise opportunity sounds like a great decision, there are some things you must know before coming to a big decision of buying a Hardee’s Franchise. As all that looks good is necessarily not always in favor.
#1 The Cost Of Buying The Franchise Is Heavy As Compared To The Initial Profits-
| KFC | Hardee’s | McDonald’s | Wendy’s | |
| Net worth required | $1,500,000 | $1,000,000 | $5,000,000 | $2,000,000 |
| Liquid capital Required | $750,00 | $300,000 | $7,500,000.00 | $5,000,000 |
| Franchise Fee (per annum) | $45,000 | $3,500 | $60,000 plus GST | $45,000 |
| Total Investment | $1,262,800 to $2,543,000 | $1,499,000 to $2,228,000 | $1000,000 to $2,200,000 | $2,000,000 to $3,700,000 |
| Net profit (per annum) | $120,000 | $140,000 | $150,000 | $66,000 |
If you desire to buy a Hardee’s franchise, make sure you go through their investment policies as they are way too high than you expect. The company demands a minimum of 1,000,000 $ net worth and liquid assets of a minimum of 3,000,000 $, which is more than its competitors.
Apart from the Franchise fee of around 25,000$ to 35,000 $, the company even demands $ 10,000 as a development fee, 4% royalty fee, 25% advertising fee. Therefore, the initial investment to buy a Hardee’s investment sums up to $ 1,499,000 to $ 2,228,000, which is a considerable amount to make a firm and dedicated decision before investing.
#2 The Training Is Tiring And Time-Consuming-
Once you get through the company’s initial requirements, the next step lies in an extensive ten weeks training for you. The training is generally given through online lectures to provide you with an insight into how the business works, its terms and conditions, and how the company runs. However, the training that masters your skills simultaneously is tiresome to pull off for an extended period.
#3 Have Disputes With Many Franchise Owners Under Lanham Act
Franchisees must be very careful while signing the franchise agreements, especially in the franchisor-franchisee termination context. The franchisor typically has the upper hand regarding post-termination obligations, and franchisors will often bring trademark infringement actions against former franchisees to enforce these obligations. Bojangle is suing Hardee’s for trademark infringement, false advertising, unfair competition, and unfair and deceptive trade practices. The fast-food chain is using Bojangle’s property to advertise and market its products. Plaintiff still has complaints regarding Hardee’s burger bearing the infringing likely to cause confusion and deceive consumers.
#4 The Pandemic Has Slowed Down The Progress Of The QSR Industry-
As we all know, the pandemic has affected all the small scale and big scale industries and businesses globally; the food industry is no exception? People are scared to consume outside food, which has led to the slow progress of the food industry. However, the industry is slowly recovering from the lockdown effects, but one should keep in mind that earning profits from Hardee’s or any other food venture might take some time. At the same time, bringing the client back to a new franchisee outlet will be strenuous.
#5 The Lewd Ad Impacted Hardee Goodwill Negatively
The Hardee’s campaign was distasteful in the way it presented the women in the advertisement. The ad was also in bad taste when it attempted to exploit women’s insecurities about their weight.Many franchise owners have to bear the cost because of this lewd marketing campaign by Hardee’s. Many franchisees complain that they cannot run their store at full potential because of the marketing setback.
Conclusion
The thought of being your boss and managing a company is a dream of many. But before you conclude buying a franchise, you must consider the hard work and dedication you would have to put into it. Also, researching the terms and conditions, communicating with existing franchise owners can help you make a decision that can earn you profit and make your investment worthwhile.
However, Hardee’s is a global food chain brand; which has successfully satisfied its customers with its delicious meals.
But investing all your money and savings at once; requires a lot of risk and dedication. So, think twice and thrice and take a deeper look at all the aspects and conditions before deciding to buy a franchisee.
Sources:
http://mark28.blogspot.com/2015/09/the-resurrection-of-Hardee’s-and-demise.Html
https://www.courthousenews.com/wp-content/uploads/2017/07/biscuits.pdf