Hardee's Franchise Operating Costs: Exploring Expenses (2023)

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The fast food service industry is booming, and it is estimated to reach a staggering $19.3 billion by 2021. With the surge in demand for convenient and affordable meal options, brands such as Hardee’s have gained traction in the market. Hardee’s is one of the most prominent fast food restaurant chains in the US with a popular menu stacked with juicy burgers and sides. Established in 1960, Hardee’s continues to provide their customers with mouth-watering options, making it an attractive franchise opportunity.

To those interested in becoming a part of the Hardee’s family and owning their own restaurant, it is important to know the Hardee’s franchise operating costs. Operating costs include products supply, staff labor and benefits, franchise fees, advertising/marketing, operating supplies/equipment, maintenance/repairs, insurance, legal, and utilities.

In this blog post, we will be further exploring each of these aspects in detail, outlining what prospective owners can expect to cover.

Operating Expenses

When thinking about owning and operating a Hardee's franchise, it's important to understand the associated operating costs. There are several expenses that are dependant on the operations required to keep the franchise running, including product supply, staff labor and benefits,franchise fees,advertising/marketing, operating supplies/equipment, maintenance/repairs, insurance, legal, and utilities.

Breaking down the estimated budget for operating a Hardee's franchise is key to understanding the financial requirements. Here is a summary of the various expenses you should consider:

  • Product Supply
  • Staff Labor and Benefits
  • Franchise Fees
  • Advertising/Marketing
  • Operating Supplies/Equipment
  • Maintenance/Repairs
  • Insurance
  • Legal
  • Utilities

Product Supply

Running a successful Hardee's franchise requires considerable capital to purchase supplies. Based on current 2020 statistics, Hardee's operating costs include an estimated $25,000 – $35,000 for food and supplies and $14,000 – $20,000 for paper and paper products. Additionally, the average cost for cleaning and janitorial supplies is approximately $7,000 – $10,000.

Franchisees are required to purchase food and supplies from Hardee's approved suppliers, although some supplies can be purchased from other vendors. If a Hardee's licensee chooses to purchase food and supplies from approved suppliers, they are responsible for the cost of such supplies plus any freight, delivery and other costs associated with those purchases. Additionally, they are responsible for the cost of any promotional or other items purchased by the licensee.

For food and supplies, Hardee's buyers monitor current market prices, institute quantity discounts, and ensure ongoing supply. This means that franchisees can benefit from incrementally-reduced costs with increasing purchase volume. However, there are stipulations for maintaining bulk supply discounts; costs may be adjusted if an increase or decrease in usage occurs. Overall, this model helps ensure that franchisees are able to access quality ingredients for reasonable prices.

To ensure quality and the lowest possible cost, Hardee's restaurants must purchase their supplies from the approved roster of suppliers. These suppliers are diligent in sourcing quality ingredients and supplies from experienced purveyors and some are even established industry leaders.

Hardee's Franchise Operating Costs: Exploring Expenses (1)

Hardees Franchise Financial Model


Staff Labor and Benefits

As a franchise owner of a Hardee's, staff labor and benefits can be some of your greatest costs. According to the 2019 Restaurant Labor and Benefits Benchmark Study by Restaurantowner.com, the estimated cost for hourly employee salary is approximately $2,245 USD per month. Additionally, the cost per non-hourly employee salary costs approximately $5,178 USD on average.

In addition to salary, it's important to calculate the total labor cost, which includes benefits. The estimated cost for employee benefits for an hourly employee totals about $519 USD per month, and for a non-hourly employee, the cost is an average $823 USD per month. In total, an hourly employee costs about $2,764 USD a month and a non-hourly employee costs around $6,001 USD per month.

Understanding the breakdown of staff labor and benefits costs is key to running a successful Hardee's franchise. Consider the following tips to help minimize costs:

  • Secure competitive commercial insurance rates.
  • Provide flexible health benefit plans.
  • Rely on software systems to manage payroll system and track time.
  • Explore different options for part-time and seasonal employees.
  • Establish a system to monitor and cross-check wages.

Franchise Fees

Hardee's is a food service business that offers an exciting opportunity for entrepreneurs to own their own business and become part of one of the fastest growing fast-food franchises in America. Before you make the decision to purchase a Hardee's franchise, you should be aware of the associated franchise fees that you'll need to pay.

Franchise operators must pay an initial franchise fee of $19,400 to $35,000. Additionally, operators will be required to keep up with ongoing royalty and advertising fees. The ongoing royalty fee is 6% of gross sales which is paid each week. The advertising fee is 1.5% of gross sales which is paid semi-annually. On average, Hardee's owners spend around $90,000 for their initial investment of opening a new location.

For existing Hardee's locations, the fee structure is somewhat different. Operators that purchase an existing restaurant must pay an initial franchise fee that is different from owners who are opening a new location. The initial franchise fee for owners who purchase an existing location is between $18,400 to $29,000. In addition to the initial franchise fees, existing owners must pay the same ongoing royalty and advertising fees.

When considering the costs of a Hardee's franchise, there are several additional fees to take into account. For example, franchisees will be required to pay a monthly service fee of around $350. Also, operators must purchase branded supplies like uniforms, signage and utensils. The cost of these items will vary depending on the location of the franchise.

Knowing the expected franchise fees associated with Hardee’s is essential when budgeting and planning a franchise purchase. It’s important to carefully review all of the costs associated with a Hardee’s franchise to simplify the business process and maximize profitability.

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Advertising and marketing are essential components of any franchise's success. With Hardee's, franchisees have access to a number of marketing initiatives, including national and local advertising, promotional support, and digital marketing resources. According to the latest Franchise Disclosure Document released by Hardee's, advertising costs can range anywhere from 2-6% of gross sales. For example, a franchisee whose gross sales totaled $1,000,000 would incur $20,000 - $60,000 in advertising costs.

Hardee's offers a range of advertising services, all designed to help increase sales and profits. Franchisees can take advantage of national campaigns, including a variety of advertisements, press releases, and digital media campaigns. In addition, Hardee's provides local marketing initiatives, such as local store marketing, digital store marketing, sampling, and in-store radio. These initiatives are designed to bring customers into local restaurants and strengthen the local presence.

Other marketing opportunities include corporate sponsorship, such as tie-ins with popular sports leagues, celebrities, and other events. Hardee's also features an online presence, including a website, social media presence, and managed SEO solutions. All of these strategies work together to create an effective, comprehensive marketing strategy for Hardee's franchisees.

Advertising and marketing are essential investments for any business, and Hardee's offers a comprehensive array of opportunities for franchisees to be successful. With the right strategy and resources, a Hardee's franchisees can see a dramatic increase in sales and profits, while also building a strong local presence.

Operating Supplies/Equipment

When considering the operating costs of opening a Hardee's franchise, it is important to plan for the necessary supplies and equipment. On average, Hardee's franchisees report spending about $395,500 in operating supplies and equipment. This includes costs for furniture, kitchen equipment and supplies, and other miscellaneous items.

Like many restaurants, the cost of kitchen equipment and supplies is a major component of the supplies and equipment costs for Hardee's franchisees. Kitchen equipment and supplies account for $121,500 on average, with furnishing costs representing $152,000 of that amount. These amounts should include all necessary equipment, such as servers and grills, as well as necessary cookware, pots and pans, dishware, and other kitchen utensils.

In addition to kitchen supplies and equipment, Hardee's franchisees need to factor in costs for the necessary furnishing, such as tables and chairs, and interior decorations. The average cost for this type of furnishing is estimated to be around $82,000.

Finally, miscellaneous expenses, such as uniforms, cleaning supplies, and other necessary goods, should be taken into account when budgeting for opening a Hardee's franchise. On average, this category of costs is estimated to be around $40,000, but can vary depending on the size of the restaurant and the city in which it is located.

Overall, it is important for prospective Hardee's franchise owners to take the time to properly budget for operating supplies and equipment. Though the exact costs may vary based on the individual needs of the franchise, undertaking a thorough budget planning process will be essential for the success of your business.

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While operating a Hardee's franchise, it is important to factor in maintenance and repairs as part of your business expenses. In 2019, according to the Franchise Disclosure Document (FDD), Hardee’s expected franchise owners to incur maintenance and repair cost averages of $7,800 and $17,200 respectively. On the lower side of the estimated range, franchise owners spend $5,000 and $11,400, while on the higher end of the range, franchise owners spend $11,000 and $25,000 on maintenance and repair costs. This is dependent on a combination of factors, including the size and location of the restaurant and store upgrades.

Marginal expenses for maintenance can include plumbing and air conditioning repairs, interior and exterior painting, general upkeep of the restaurant, and pest control. More serious areas, such as roof replacement, tiling, and kitchen repairs, can become significant investments. Maintenance is best managed by the franchise owner when possible, but it may be necessary to invest in external professionals when repairs become more complex.

It is important to remember that budgeted amounts depend on individual locations and the restaurant owner should always consult with their local operating team and store to get a better understanding of their maintenance and repair costs. Hardee’s encourages franchise owners to have a clear plan and budget for maintenance and repairs in order to keep the restaurant running smoothly.


When starting a Hardees franchise, insurance is an important factor to consider. Generally speaking, franchisees need to choose between a Tort liability and Comprehensive General liability (CGL). Tort liability covers damages related to food, whereas Comprehensive General liability covers off-premises claims, such as negligence or operations-related issues. In most cases, Hardees will require franchisees to purchase CGL coverage.

In particular, estimates of insurance expenditures for a Hardees franchise range widely depending on the type of coverage purchased, but can typically range from $3,200 to more than $10,000 per year. Franchisees should note that some states, such as California, have minimum requirements regarding the types and amounts of coverage that must be carried in addition to liability insurance.

Other types of insurance, such as workers compensation or commercial auto insurance, may also be required for a Hardees franchise depending on the franchisee’s specific circumstances. The cost of these policies is likely to vary depending on the type of business being operated, but can range from several hundred to several thousand dollars per year.

To provide protection for the business itself and its assets, Hardees may also require that franchisees purchase a number of different policies, such as Directors and Officers insurance, and property insurance. This coverage can potentially cost several thousand dollars, depending on the type of coverage purchased and the size of the business.

Finally, more specialized coverage, such as product liability coverage, may also be necessary for some businesses and can potentially add several thousand dollars more to the annual Insurance costs.


When it comes to investing in Hardee's or any other franchise, there are legal costs you need to consider. Legal fees can range greatly, depending on the services provided. According to the SBA’s Office of Advocacy, the average legal start-up cost for a franchise is $3,000 - $10,000. This includes expenses like obtaining a trademark, filling out paperwork, audits, setting up an entity and managing taxes.

If you’re investing in Hardee's, you can expect certain legal costs to include:

  • Obtaining a trademark: The cost of obtaining a trademark ranges from $225 to $400 per mark, plus attorney fees for preparing and filing required documents. Additionally, it costs about $200 for a Name Reservation Certificate and about $800 for a franchise agreement.
  • Filling out paperwork: This can cost anywhere from $1,500 to $3,000 depending on the complexity of the paperwork and whether or not an attorney is needed.
  • Audits: Depending on the size of the franchise, it can cost between $3,000 and $25,000 to complete an audit. The complexity of the audit determines the exact costs.
  • Setting up an entity: Setting up an entity such as LLC or corporation can cost anywhere between $200 and $1,500.
  • Managing taxes: This includes filing taxes and paying estimated taxes. Franchise owners can expect to pay an estimated $2,000 to $5,000 in taxes each year.

In total, the average legal costs for a Hardee's franchise are estimated at $10,000 to $30,000.


Operating a Hardee’s franchise requires budgeting for many types of expenses, including utilities. It is necessary to pay for the electricity and gas used in preparing and serving food as well as for climate control in the restaurant. The annual cost for utilities for a Hardee’s restaurant averages between $20,000 and $30,000 USD. Specific monthly utility costs vary by region.

In cold climates, especially in those with a large number of winter months, it is important to budget for winter heating costs. Additionally, many restaurant operations may rely on propane or fuel oil for heating, requiring a significant spend. Additionally, areas with long summer months, or those locations with particularly temperate climates, will have a higher summer cooling expense as they must budget for an air conditioning system and monthly refrigeration needs.

It is important to review all local utility regulations before opening a Hardee’s franchise. Most states and cities have specific regulations regarding the on-site use of gas, electric, water, and other utility services. Restaurants may need to meet certain standards to ensure safety and compliance. Additionally, it is important to note that city utilities may have additional fees that are not based on direct usage.

Utilities expenses should be accounted for in the monthly restaurant budget. Depending on the specific location, it can be best to use a multiplier, as noted above, when budgeting for monthly utilities to account for possible seasonality. Knowing the local weather patterns, as well as being familiar with the local regulations, can aid in the planning process for utility costs.


In closing, opening a Hardee's franchise requires significant capital investment from its prospective owners. Operating costs typically include product supply, staff labor and benefits, franchise fees, advertising/marketing, operating supplies/equipment, maintenance/repairs, insurance, legal, and utilities. Factors such as location, lease terms, and square footage can also affect total costs. However, the average investment of an owner with one restaurant is estimated to be approximately $325,000 - $1.3 million.

The investment may seem daunting initially, but ultimately the right setup and careful budgeting can help make the cost of operating a Hardee’s restaurant more manageable. With the right tools and guidance, owners can turn their Hardee’s franchise into a successful venture.

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