What three entities is the Hardee's Advertising and Promotional Obligation (APO) divided between?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| upon receipt of invoice | |||
| Hardee’s Advertising | An advertising and promotional obligation (“APO”) in an amount set forth in your Franchise Agreement. Your APO will be up to 7% of Hardee’s Gross Sales. Currently, your APO is 5.5% of Hardee’s Gross Sales. (3) | Divided between HNAF, Regional Co-op and LSM (each as defined below) | |
| Hardee’s National Advertising Fund (“HNAF”) | Currently, 4.25% of Hardee’s Gross Sales | On the 10th day of each month | HNAF contributions are due on the 10th day of each month and are based on Gross Sales in the prior month. |
| Hardee’s Regional Cooperative (“Regional Co-op”) | If your Franchised Restaurant is in an area covered by a Regional Co-op, currently, minimum of 0.5% of Hardee’s Gross Sales; however, your Regional Co- op can vote to increase each member’s contribution. | Same as royalty | We have the right, in our sole discretion, to establish a regional advertising and sales promotion cooperative in the regional area in which your Franchised Restaurant is located (“DMA”) to which you will be required to contribute. |
| Hardee’s Local Store Marketing (“LSM”) | Difference between your APO and the amount you contribute to HNAF and a Regional Co-op | Not paid to HR | You may develop advertising materials for your own use; however, we must approve these advertising materials in advance of use. LSM monies may be spent only for approved advertising. (4) |
Source: Item 6 — OTHER FEES (FDD pages 29–36)
What This Means (2025 FDD)
According to Hardee's 2025 Franchise Disclosure Document, a franchisee's Advertising and Promotional Obligation (APO) is divided between three entities: the Hardee’s National Advertising Fund (HNAF), the Regional Co-op, and Local Store Marketing (LSM). The APO can be up to 7% of Gross Sales, but is currently 5.5%.
The Hardee’s National Advertising Fund (HNAF) currently receives 4.25% of Gross Sales, payable on the 10th of each month based on the prior month's sales. If the franchisee's restaurant is in an area covered by a Regional Co-op, a minimum of 0.5% of Gross Sales goes to the Regional Co-op; however, the Regional Co-op can vote to increase each member’s contribution. Hardee's retains the right to establish a regional advertising and sales promotion cooperative in the regional area in which the Franchised Restaurant is located.
The amount allocated to Local Store Marketing (LSM) is the difference between the total APO (5.5% currently) and the amounts contributed to HNAF and the Regional Co-op. These LSM funds are not paid to Hardee's, but the franchisee can use them to develop advertising materials for their own use, subject to Hardee's prior approval. This structure allows Hardee's to manage national and regional advertising while also enabling franchisees to address local market conditions with their own marketing efforts.