What is the APO allocation for a Carls Jr. restaurant during its third 12 months of operation?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
| APO Allocation by Period | Total APO | HNAF | Regional Co-op | LSM Allocation |
|---|---|---|---|---|
| Year 1: First 12 months | 2.50% | |||
| Year 2: Second 12 months | 3.50% | |||
| Year 3: Third 12 months | 4.50% | |||
| Years 4 and beyond | 5.50% |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the APO (Advertising Promotion Obligation) allocation for a restaurant in its third 12 months of operation is 4.50% of gross sales. This contribution is earmarked for advertising and promotional activities to support the Carls Jr. brand.
It's important to note that the FDD states the APO allocation is dependent on whether the new franchised restaurant is located within a DMA (Designated Market Area) that has a regional co-op. The table provided does not specify how the APO is allocated between HNAF (presumably a corporate advertising fund), regional co-op, and LSM (Local Store Marketing).
For a prospective franchisee, this means that 4.50% of their gross sales during the third year will be dedicated to advertising. Understanding how this percentage is distributed and whether the restaurant is in a regional co-op DMA is crucial for budgeting and marketing strategy. Franchisees should inquire with Carls Jr. about the specific allocation breakdown and the role of the regional co-op in their DMA to fully understand how their APO contributions will be used.