What is the total APO allocation for a Hardees franchise from the fourth year of operation onwards?
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 changes over the first few years of operation. For a Hardees franchise, the total APO allocation for the fourth year and beyond is 5.50%.
This means that starting in the fourth year, a Hardees franchisee is required to allocate 5.50% of their gross sales towards advertising and promotion. This contribution is typically split between the Hardee's National Advertising Fund (HNAF), regional co-ops, and local store marketing (LSM) efforts, though the specific allocation to each may vary.
It's important to note that Hardees has the right to reallocate the APO and increase it, but not by more than 0.5% of gross sales in any 12-month period. The APO cannot exceed 7% of gross sales, although a regional co-op can require contributions that, when combined with the HNAF contribution, exceed this 7% limit. Franchisees should be aware of these potential changes and factor them into their financial planning.