If someone asked you to name the top fast-food hamburger chains, the list might look something like this,
McDonald's, Burger King. Wendy's, 5 Guys. Shake Shack, In-and-Out Burger, Whataburger, Carl's Junior, Culver's, Sonic, The Habit Burger Grill, and maybe Johnny Rockets.
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You can debate the order and whether a chain like Culver's is primarily a burger chain, and you may argue that other chains should be on the list. One of those chains, Hardee's, falls on the “is that truly a burger chain list?” and many people may not realize how big the chain actually.
On the first point. Charbroiled Burgers are the key menu item for the chain. For the second, Hardee's may not equal McDonald's, Burger King, or Wendy's, but it still has a massive national and international footprint.
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“For over 60 years, Hardee's has brought communities together with quality, delicious food. With more than 1,800 restaurants across the U.S., and locations in 13 countries, we are committed to the best tasting food to better serve our guests,” it shared on its website.
Now, the chain actually wants to close over 75 of those locations.
Hardee's at war with long-time franchisee
Hardee's, it should be noted, shares an owner, CKE Group, with Carl's Jr. and has a similar menu, but they are not the same brand with two different names. Essentially, Hardee's is the East Coast versions of the company while Carl's Jr., operates on the West coast, but the companies do have different management.
The burger chain, at least the Hardee's version of it, has been having legal problems with one of its long-running franchise operators, Paradigm.
“Our story begins in the late 1990’s, Don Wollan, President of Paradigm, was in search to acquire and grow the Hardee’s restaurant concept. Through the creation of four operating companies (now collapsed into Paradigm), the company acquired 14 restaurants in Springfield, IL in December 1999, 42 restaurants in Mobile, Biloxi and Pensacola in February 2000 and 64 restaurants in Huntsville and Montgomery, AL in October 2000,” Paradigm shared on its website.
The franchise operator flourished for decades.
“Through a series of divestitures, closures, acquisitions and new store development spanning a 22 year period, the Company today owns 82 Hardee’s restaurants in Huntsville, Montgomery and Mobile, AL, Pensacola, FL, Panama City, FL and Biloxi, MS,” it added.
More closings:
- Popular retail chain to close unprofitable store locations
- Bankrupt retail chain unloads store leases, key asset
- Popular discount retailer files bankruptcy, closes all stores
That number has now dropped to 76, but it was not that long ago that Hardee's owner CKE was giving Paradigm awards.
“In 2009, Paradigm was honored as recipient of the prestigious Wilbur Hardee Founder’s Award as the top franchisee in the Hardee’s system. In 2010, the Paradigm was honored as the top franchisee in the entire CKE chain of restaurants (including all Carl’s and Hardee’s Franchisees). In 2011 & 2012, Paradigm was recognized as the first company in CKE’s history to win back to back awards as Developer of the Year across both brands,” the franchisee shared.
Now, Hardee's wants to take away Paradigm's franchise agreement and close its 76 stores.
Hardee's has a franchisee fight
Hardee's has sent Paradigm notice that it intends to terminate its franchise agreement with the chain “citing the group’s failure to participate in the brand’s loyalty program and comply with operating hours, among other issues.”
Paradigm has filed a lawsuit to fight those claims and keep its 76 stores alleging that the parent company “unilaterally amended its operating manual to force franchisees to comply with fees and technology requirements not included in the franchise agreement.”
“They were ramming things down our throat which weren't in the franchise agreement,” said Paradigm. CEO Don Wollan in an interview.with Franchise Times “And once you allow them to do that…You've got to create a business reason for me to want to opt into it, right? But what you can't do is shove it down my throat. And once I let you shove it down my throat, I've created a precedent, and what would stop you from trying to force-feed every fee that you could imagine down to me?”
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He claims Hardee's has acted in bad faith which hurt his chain which operates locations in Alabama, Florida, Mississippi and Tennessee.
“Wollan said the brand’s insistence that his stores adhere to specific operating hours, despite a negative impact on sales, and its push to collect undisclosed fees, among other events, led to the lawsuit,” according to the website.
