Under what condition will a Hardee's franchisee be required to contribute to a Regional Co-op?
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. |
Source: Item 6 — OTHER FEES (FDD pages 29–36)
What This Means (2025 FDD)
According to Hardee's 2025 Franchise Disclosure Document, a franchisee is required to contribute to a Regional Co-op if their franchised restaurant is located in an area covered by a Regional Co-op. The minimum contribution is currently 0.5% of the restaurant's gross sales. However, the Regional Co-op has the ability to vote to increase each member's contribution. Hardee's also retains the right to establish a regional advertising and sales promotion cooperative in the regional area where the franchisee's restaurant is located, also known as a Designated Market Area (DMA), and require contributions. These contributions are due at the same time as royalty payments.
This means that if Hardee's establishes a Regional Co-op in the DMA where a franchisee's restaurant is located, the franchisee will be obligated to contribute a minimum of 0.5% of their gross sales to the co-op. This percentage could increase if the members of the Regional Co-op vote to raise the contribution amount. The funds are intended for regional advertising and sales promotion efforts.
Franchisees should be aware that Hardee's has the discretion to establish these regional co-ops, which could add to their overall advertising and promotional obligations. The advertising and promotional obligation (APO) can be up to 7% of gross sales, with the current APO being 5.5% of gross sales. This amount is divided between the Hardee's National Advertising Fund (HNAF), Regional Co-op, and Local Store Marketing (LSM). Franchisees need to factor in this potential additional cost when evaluating the financial feasibility of a Hardee's franchise.