What is the total APO allocation for a Carls Jr. franchise during its first 12 months of operation?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
| APO Allocation by Period | Total APO |
|---|---|
| Year 1: First 12 months | 2.50% |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the total APO (Advertising Promotion Obligation) allocation for a new franchise during its first 12 months of operation is 2.50% of gross sales.
This APO allocation covers contributions to various advertising and promotional activities. While the table specifies the total APO, it does not break down the allocation percentages for HNAF (presumably a national advertising fund), regional co-op advertising, or local store marketing (LSM) for the first year. The allocation for these sub-categories is not specified in this table.
It's important to note that the APO allocation is dependent on whether the new Carls Jr. restaurant is located within a DMA (Designated Market Area) that has a regional co-op. This suggests that the allocation might vary, and franchisees should clarify with Carls Jr. how the APO funds are distributed in their specific market. Also, a Travel Center Development Incentive Program Addendum indicates that the APO fee will be reduced to 2% of Gross Sales during the Initial Term of the Franchise Agreement. Furthermore, the APO to be paid by the franchisee will be reduced by 3% of Gross Sales for Gross Sales accruing during the Franchised Restaurant's first 12 months of operation under the Franchise Agreement.