What is the total APO allocation for Carls Jr. during the initial term?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
| APO Allocation by | Total | HNAF | Regional | LSM |
|---|---|---|---|---|
| Period | APO | Co-op | Allocation | |
| Initial Term | 2.00% |
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 during the initial term is either 2.00% or 3.00%. However, the document states that 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.
Carls Jr. also offers development incentive programs that may affect the APO. For example, there are Travel Center Development Incentive Programs and Conversion Restaurants Standard Development Incentive Programs. These programs may include addendums that modify the standard franchise agreement, potentially altering the royalty fee and APO amounts for a limited time.
It is important to note that these incentives can be terminated if the franchisee fails to meet certain obligations, such as opening the restaurant on time or failing to cure a default notice. If terminated, the APO reverts to the amount set forth in the original Franchise Agreement. Therefore, prospective Carls Jr. franchisees should carefully review the specific terms of their Franchise Agreement and any applicable addendums to understand their APO obligations.