What section of the Carls Jr. Franchise Agreement outlines the Franchisee's Advertising and Promotion Obligation (APO)?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
8. ADVERTISING AND PROMOTION
A. Contributions/Expenditures by Franchisee
During the term of this Agreement, Franchisee shall have a weekly advertising and promotion obligation ("APO") in the amount set forth in Section 6.C. and Appendix C. Following written notice to Franchisee, CJR may modify the amount and allocation of the APO subject to the provisions of Section 8.F. Franchisee shall pay, at the same time and in the same manner as the royalty fee, that portion of the APO as CJR may direct to the Production Fund in accordance with Section 8.B. The remainder of the APO shall be paid, at the same time and in the same manner as the royalty fee, to the Media Fund in accordance with Section 8.C.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, Section 8 of the Franchise Agreement, titled "Advertising and Promotion," outlines the franchisee's advertising and promotion obligations (APO). This section details the franchisee's required contributions and expenditures towards advertising and promotional activities.
Specifically, Section 8.A discusses the franchisee's weekly APO amount, which is further specified in Section 6.C and Appendix C. Carls Jr. retains the right to modify the APO amount and its allocation, provided they give written notice to the franchisee, as per Section 8.F. The franchisee's payments are divided between the Production Fund and the Media Fund, with the timing and manner of payment mirroring that of the royalty fee.
Appendix C of the Franchise Agreement, titled "Franchisee's Advertising and Promotion Obligation," further defines the franchisee's APO under Section 8. This obligation remains in effect unless Carls Jr. modifies it as described in Section 8. Therefore, prospective franchisees should carefully review Section 8, Section 6.C, and Appendix C of the Franchise Agreement to fully understand their financial obligations for advertising and promotion.