Does the Hardees Franchise Agreement include a section specifying the Franchisee's Advertising and Promotion Obligation?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
8. ADVERTISING AND PROMOTION
A. Contributions/Expenditures by Franchisee
During the term of this Agreement, Franchisee shall have a weekly advertising and promotion obligation ("APO") in the amount set forth in Section 6.C. and Appendix C. Following written notice to Franchisee, HR may modify the amount and allocation of the APO subject to the provisions of Section 8.E. Franchisee shall pay that portion of the APO as HR may direct to the Hardee's National Advertising Fund ("HNAF") in accordance with Section 8.B. The remainder of the APO shall be paid, as directed by HR, at the same time and in the same manner as the royalty fee, to a Regional Co-op in accordance with Section 8.C., and/or spent by Franchisee for local store marketing ("LSM") in accordance with Section 8.D.
B. Hardee's National Advertising Fund
HR has established, and will maintain and administer HNAF for the creation and development of advertising, marketing, social media and public relations, research and related programs, gift card and loyalty programs, activities and materials that HR, in its sole discretion, deems appropriate. Franchisee shall contribute to HNAF the amount set forth in Appendix C, as may subsequently be modified pursuant to Section 8.E. Hardee's Restaurants operated by HR and its affiliates shall contribute to HNAF on the same basis as comparable franchisees. Unless modified in writing by HR, HNAF contributions are due on the tenth (10th) day of each month.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the Franchise Agreement does include a specific section addressing the franchisee's advertising and promotion obligations. Section 8 of the agreement is dedicated to "Advertising and Promotion" and outlines the franchisee's responsibilities for contributing to advertising efforts. This section details how franchisees must allocate a certain amount, referred to as the Advertising and Promotion Obligation (APO), for advertising and promotional activities. The specific amount of the APO is detailed in Section 6.C and Appendix C of the Franchise Agreement.
The APO is divided into contributions to the Hardee's National Advertising Fund (HNAF), regional co-ops, and local store marketing (LSM). Hardees directs how the APO is allocated among these three areas. The HNAF is used for national-level advertising and marketing programs, while regional co-ops focus on advertising within specific geographic areas. Franchisees are also required to spend a portion of their APO on LSM, which includes advertising and promotional activities targeted at the local community.
Hardees retains significant control over advertising and marketing efforts, including the HNAF and regional co-ops. Hardees has the discretion to modify the amount and allocation of the APO, establish and terminate regional co-ops, and direct all advertising programs financed by the HNAF. Franchisees are required to participate in all advertising, marketing, promotions, research, and public relations programs instituted by the HNAF. Franchisees must also provide documentation of their LSM expenditures to Hardees on a quarterly basis.