How are advertising and marketing contributions for both company-operated and franchised Carls restaurants generally determined?

According to Carls's 2024 Franchise Disclosure Document, advertising and marketing contributions for both company-operated and franchised restaurants are generally determined based on a percentage of revenue. These contributions are made to the applicable advertising funds ratably throughout the year. This means that the amount a franchisee or company-operated restaurant contributes is directly tied to how much revenue they generate.

Carls administers the Carl's Jr. Fund advertising and marketing programs, certain international advertising funds, and HNAF (Hardee's National Advertising Fund) internally. A third party administers the Hardee's local co-operative advertising funds. This indicates that Carls has a significant degree of control over the advertising and marketing strategies and how the funds are allocated, particularly for the Carl's Jr. brand and national-level advertising.

For a prospective franchisee, this means that a portion of their revenue will be allocated to advertising and marketing efforts. The franchisee will need to factor this percentage into their financial projections and business planning. The fact that contributions are made ratably throughout the year may help with budgeting and cash flow management. It is important for potential franchisees to understand the specific percentage of revenue required for advertising contributions and how these funds are used to support the Carls brand.