Hardees wants to shut down 76 restaurants that refuse to stay open past 2 p.m.

Published: Monday, May 26, 2025 at 5:07 pm

Hardee's Franchise Fight: 76 Restaurants Face Closure Over Operating Hours and Digital Demands

A major Hardee's franchise operator, Paradigm Investment Group, is locked in a legal battle with the fast-food chain's parent company, CKE Restaurants, potentially threatening the closure of 76 restaurants across four states. The core of the dispute revolves around CKE's demands for extended operating hours and the implementation of digital services, including third-party delivery, online ordering, and loyalty programs.

Paradigm, which has invested over $173 million in its Hardee's locations and paid over $87 million in royalties, claims these requirements are financially unsustainable and violate their franchise agreements. They argue that keeping stores open until 10 p.m., as mandated by CKE, is unprofitable due to low customer traffic after 2 p.m. Furthermore, Paradigm objects to the financial burden of the digital initiatives, including a technology fee and a loyalty program where franchisees bear the costs while Hardee's retains customer data. They also contest paying royalties on delivery fees, viewing them as an expense rather than revenue.

The lawsuit alleges CKE is employing "heavy-handed tactics" and imposing undisclosed fees through amendments to operating manuals, circumventing franchise agreements. Paradigm also points to a potentially misleading statement Hardee's made to its bank in 2022, claiming the company stated Paradigm was in good standing despite the current dispute. Paradigm's CEO, Don Wollan, has criticized the franchisor's aggressive approach, warning of a dangerous precedent if franchisees accept these unilateral changes. Paradigm also highlights that Hardee's does not apply the same stringent requirements to its own corporate-run stores.

The dispute began after Roark Capital acquired CKE in 2013, with Wollan noting the negative impact of constant leadership changes. The outcome of this lawsuit will significantly impact the future of these 76 Hardee's locations and could set a precedent for other franchise agreements within the fast-food industry.

BNN's Perspective: This case highlights the ongoing tension between franchisors and franchisees, particularly in the evolving digital landscape. While franchisors need to adapt to changing consumer preferences, they must also respect the financial viability of their franchisees. A balanced approach that considers the needs of both parties is crucial for the long-term health of the Hardee's brand.

Keywords: Hardee's, franchise, lawsuit, CKE Restaurants, Paradigm Investment Group, restaurant closure, operating hours, digital services, third-party delivery, online ordering, loyalty program, franchise agreement, fees, financial burden, Don Wollan, Roark Capital, fast food, business dispute, legal battle, franchise termination.

Full Story