KBRA assigns preliminary ratings to one class of notes from Hardee's Funding LLC, Carl's Jr. Funding LLC, Series 2024-1 (CKE 2024-1, or Series 2024-1 Notes) a whole business securitization (WBS). In conjunction with the issuance of Series 2024-1, KBRA expects to affirm the ratings on the Co-Issuers’ outstanding Series 2018-1 Class A-1 and A-2-III Notes, Series 2020-1 Class A-2 Notes and Series 2021-1 Class A-2 Notes (the Existing Notes and, together with the Series 2024-1 Notes, the Notes) and withdraw the ratings on the Co-Issuers’ Series 2018-1 Class A-2-II Notes which are being redeemed in full primarily through proceeds generated from issuing the Series 2024-1 Class A-2 Notes. The ratings are consistent with the results of our cash flow analysis following the addition of the Series 2024-1 Notes. KBRA has considered the contemplated Series 2018-1 VFN upsize in the rating of Series 2024-1 and the anticipated rating actions on the outstanding classes of notes. Transaction collateral includes existing and future domestic and international franchise agreements, existing and future domestic company-operated restaurant royalties, existing and future profits from domestic company-operated restaurants, certain owned real estate, franchisee leases and intellectual property.

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Related Publications

• Hardee’s Funding LLC & Carl’s Jr. Funding LLC Surveillance Report
• Carl's Jr. Funding LLC, Hardee's Funding LLC Series 2021-1 New Issue Report

Methodologies

• ABS: Whole Business Securitization (WBS) ABS Global Rating Methodology
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1003409

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