How are advertising and marketing contributions generally determined for Hardees restaurants?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
nd other receivables from certain of our franchisees. The financial condition of our franchisees is, in part, dependent upon the underlying business trends of our brand. This concentration of credit risk is mitigated, in part, by the large number of franchisees and the short-term nature of the receivables.
We record provisions for estimated credit losses on receivables when we believe our franchisees are unable to make their required payments. We cease accruing royalties and rent revenue from franchisees during the fiscal quarter in which we determine that collectibility of such amounts is not reasonably assured. There are a number of different actions we and/or our franchisees may take to resolve or mitigate franchise collection issues. These actions may include a reduction or deferral of future royalties, a reduction or deferral of future rent for which we are the landlo
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, both company-operated and franchised restaurants share in the costs of advertising and marketing programs. These contributions are typically calculated as a percentage of revenue. The contributions are then made to the relevant advertising funds throughout the year.
Hardees has different advertising funds. The Carl's Jr. Fund, certain international advertising funds, and the Hardee's National Advertising Fund (HNAF) are administered internally. However, the Hardee's local co-operative advertising funds are managed by a third party. This means that while Hardees oversees the national and some international advertising efforts, local advertising is handled separately.
For company-operated restaurants, the advertising costs contributed to these funds are eliminated during financial consolidation. In fiscal years 2025 and 2024, company-operated restaurants contributed $19,626 and $18,735, respectively. Any local or additional advertising costs not covered by these advertising funds are expensed as they are incurred. This indicates that Hardees franchisees may have some flexibility in local advertising, but they would need to cover those costs themselves.