Under what conditions can Hardees modify the amount and allocation of the franchisee's weekly advertising and promotion obligation (APO)?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Franchisee shall contribute to HNAF the amount set forth in Appendix C, as may subsequently be modified pursuant to Section 8.E.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Hardees Restaurants LLC (HR) has the ability to modify the amount and allocation of a franchisee's weekly advertising and promotion obligation (APO). This modification can occur after Hardees provides written notice to the franchisee, and it is subject to the provisions outlined in Section 8.E of the franchise agreement. The APO is initially determined as specified in Section 6.C and Appendix C of the agreement.
The franchisee's APO payments are directed by Hardees. A portion of the APO is paid to the Hardee's National Advertising Fund (HNAF), while the remaining amount is directed to a Regional Co-op or spent by the franchisee on local store marketing (LSM), as determined by Hardees. The amount contributed to HNAF is detailed in Appendix C and can be modified according to Section 8.E.
This means that Hardees retains control over how advertising and promotional funds are spent, and franchisees must adhere to Hardees's directions regarding these expenditures. Franchisees should pay close attention to any written notices from Hardees concerning changes to the APO, as these changes can impact their financial obligations and marketing strategies. Understanding Section 8.E of the franchise agreement is crucial for franchisees to stay informed about the conditions under which Hardees can modify the APO.