For Hardees franchises, what are some examples of inappropriate expenditures for which a franchisee cannot spend Local Store Marketing (LSM) monies?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's LSM expenditures shall not include payments for items that HR, in its sole discretion, deems inappropriate to meet the minimum advertising requirements. As of the date of this Agreement, inappropriate expenditures for which Franchisee cannot spend LSM monies include, without limitation, free or discounted food (unless expressly authorized by HR in connection with a System or brand promotion), employee incentive programs, charitable contributions, payments in connection with permanent on-premises menu boards, lighting, yellow pages, entertainment discount books, the purchase or maintenance of vehicles, and other similar payments.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, franchisees are restricted from using Local Store Marketing (LSM) funds for specific types of expenditures. Hardees, at its discretion, identifies certain items as inappropriate for meeting the minimum advertising requirements.
These inappropriate expenditures include, but are not limited to, free or discounted food unless Hardees expressly authorizes it for a system or brand promotion. Franchisees also cannot use LSM funds for employee incentive programs, charitable contributions, payments related to permanent on-premises menu boards, lighting, or yellow pages advertising. Additionally, LSM funds cannot be used for entertainment discount books or the purchase or maintenance of vehicles.
This policy ensures that LSM funds are used in ways that Hardees believes will most effectively promote the brand and maintain its standards. Franchisees need to be aware of these restrictions to avoid misallocation of funds and potential penalties. It is important for prospective franchisees to fully understand these limitations and seek clarification from Hardees on any specific expenditures they are considering for LSM.