What is the Media Fund used for regarding Carls Jr. advertising?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
and endorsements used in those programs and activities, and the geographic, market and media placement and allocation of advertising and marketing materials. We usually work with an advertising agency in developing advertising for print, radio, Internet and television and leverage internal and contract creative services.
Our predecessor also has established, and we will maintain and administer, a fund for all working media costs ("Media Fund"). We or our designee direct all advertising, marketing, and public relations programs and activities financed by the Media Fund with sole discretion over the creative concepts,
materials and endorsements used in those programs and activities, and the geographic, market and media placement and allocation of advertising and marketing materials.
CJR will administer the Production Fund and the Media Fund (at times referred to as the "Funds"). The Production Fund and Media Fund are not trust or escrow accounts, and CJR has no fiduciary obligation to franchisees with respect to them. CJR or its designee has the right to terminate (and subsequently restart) the Production Fund or the Media Fund or establish different advertising funds. CJR may incorporate any advertising fund and may have a separate entity manage any advertising fund. In the fiscal year ended January 27, 2025, of the total monies spent by the Funds, 11% was spent for production; 74% was spent for media placement; 1% was spent on research/marketing consulting fees; and 14% was spent for miscellaneous expenses, including administrative expenses.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 42–55)
What This Means (2025 FDD)
According to Carls Jr.'s 2025 Franchise Disclosure Document, the Media Fund is used for all working media costs related to advertising, marketing, and public relations programs. Carls Jr. or its designee directs these programs, having sole discretion over the creative concepts, materials, endorsements, and the placement and allocation of advertising across different media channels and markets. Franchisees are required to contribute to the Media Fund, with the current allocation being approximately 5% of Gross Sales.
The funds are used for advertising, marketing, and public relations programs and activities. These activities include the creation and development of advertising, marketing, and public relations, research and related programs, gift card and loyalty programs, activities and materials that Carls Jr. deems appropriate.
For the fiscal year ended January 27, 2025, 74% of the total monies spent by the Funds was allocated to media placement. This indicates that a significant portion of the Media Fund is dedicated to securing advertising space across various media platforms. The remaining funds were allocated to production (11%), research/marketing consulting fees (1%), and miscellaneous/administrative expenses (14%).
Prospective franchisees should note that Carls Jr. has the right to reallocate or change the APO split between the Production Fund and the Media Fund. There is no franchisee advertising council that advises Carls Jr. on advertising policy, meaning franchisees have limited direct input on how these funds are spent.