What is the APO allocation for Hardees franchisees during the first 12 months of operation?
Hardees 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 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the APO (Advertising and Promotion Obligation) allocation for franchisees during their first 12 months of operation is 2.50% of gross sales.
This APO contribution is allocated to support advertising, marketing, social media, public relations, research, gift card and loyalty programs, and related activities. These funds are used at Hardees's discretion to promote the brand and support franchisees. The franchisee's contribution is split between the Hardee's National Advertising Fund (HNAF), regional co-ops, and local store marketing (LSM) efforts, as directed by Hardees.
Hardees has the right to modify the APO allocation and even increase the APO, but with limitations. Hardees cannot increase the APO by more than 0.5% of gross sales in any 12-month period, and the APO cannot exceed 7% of gross sales. However, contributions to a regional co-op could potentially push the total APO above this 7% limit. The specific allocation between HNAF, regional co-ops, and LSM can vary, and franchisees need to stay informed about how Hardees directs these funds to maximize their marketing impact.