What is the APO allocation for Hardees franchisees from the fourth year of operation and beyond?
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 from the fourth year of operation and beyond is 5.50% of gross sales.
During the first three years of operation, the APO allocation increases annually. In the first year, it is 2.50% of gross sales, then rises to 3.50% in the second year, and 4.50% in the third year. After the third year, the APO settles at 5.50% of gross sales.
The APO is used for advertising, marketing, social media, and public relations efforts. Hardees has the right to reallocate the APO and increase it, but the increase cannot exceed 0.5% of gross sales in any 12-month period, and the APO cannot exceed 7% of gross sales. However, a regional co-op can require contributions that, when added to the franchisee's HNAF contribution, result in a total APO exceeding 7% of gross sales.
It's important for prospective Hardees franchisees to understand these advertising obligations, as they represent a significant ongoing expense. Franchisees should inquire about how the APO is allocated between the HNAF, regional co-ops, and local store marketing to understand how their contributions will be used to promote the Hardees brand and their individual restaurant.