A high-stakes legal battle has erupted between Hardee’s and a major franchisee group, with 76 restaurants—and the future of a once-iconic burger brand—hanging in the balance.
At a Glance
- Paradigm Investment Group operates 76 Hardee’s and is suing to stop their franchise agreements from being terminated
- Hardee’s demands late-night hours, third-party delivery, and new tech fees Paradigm says were never agreed to
- Paradigm alleges the company is forcing franchisees into bankruptcy to seize locations
- Hardee’s has closed over 150 restaurants since 2021 amid poor performance and unstable leadership
- Paradigm could face $13 million in damages if the lawsuit fails
Franchise Showdown Over Profit-Killing Mandates
Paradigm Investment Group, one of the largest and most successful operators in the Hardee’s system, is accusing the company of using “heavy-handed” tactics to force their restaurants to operate at a loss—or be shut down entirely. The dispute centers on new corporate mandates that include staying open until 10 p.m., offering delivery, and paying for unapproved tech upgrades.
Watch a report: Hardee’s Franchisees Rebel Over Corporate Rules.
Paradigm says these policies ignore local market realities. Many of its restaurants in Alabama, Mississippi, Tennessee, and Florida make most of their revenue before 2 p.m., and extended hours only drain staff and increase losses. Yet Hardee’s, under pressure from private equity owner Roark Capital, is demanding full compliance—or full closure.
“They Want Us to Fail and Hand Over the Keys”
CEO Don Wollan says the company’s true aim is a “hostile takeover” of profitable stores, with Hardee’s hoping to bankrupt operators, repossess their locations, and resell them for fresh franchise fees. “Once I let you shove it down my throat,” Wollan said, “what would stop you from trying to force-feed every fee you could imagine?”
Paradigm’s lawsuit claims Hardee’s is violating its own contracts and destroying franchise value with every new executive pivot. With five different CEOs since 2017, Paradigm argues there’s no consistency—just a string of expensive, ineffective mandates forced on operators with no voice in policy-making.
Decline of a Burger Brand
The numbers tell a grim story. Hardee’s has shuttered more than 200 stores in a decade, 150 since 2021. Its average unit volume remains well below top competitors. Instead of supporting high-performing franchisees, Paradigm says corporate has chosen to cannibalize them for short-term gain.
“If Paradigm gave in,” the company argues, “there would be no limit to the fees Hardee’s could impose.” That includes surrendering control over pricing, hours, and even product offerings—destroying what Paradigm calls “the unit economics of our business.”
Now facing termination and $13 million in damages, Paradigm’s lawsuit isn’t just about burgers—it’s a battle for franchise independence, small business rights, and the future of what remains of the Hardee’s brand.
