What is the total 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 during its third 12 months of operation is 4.50% of gross sales. This contribution is allocated to support advertising and promotional activities for the Carls Jr. brand.
It is important to note that the APO allocation might be dependent on whether the new franchised restaurant is located within a DMA (Designated Market Area) that has a regional co-op. This suggests that the allocation could vary based on the specific market and the presence of a regional advertising cooperative.
Carls Jr. also offers development incentive programs that may affect the APO. For example, the Travel Center Development Incentive Program Addendum could modify the standard APO fees for a limited time. These incentives may reduce the APO during the first three years of operation, but after the incentive period, the APO will revert to the standard amount of 5.5% of gross sales. Franchisees should carefully review any addendums to understand how these incentives might impact their APO obligations.