What is the weekly advertising and promotion obligation (APO) for a Hardees franchisee, as defined in the franchise agreement?
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.
HR has established, and will maintain and administer HNAF for the creation and development of advertising, marketing, social media and public relations, research and related programs, gift card and loyalty programs, activities and materials that HR, in its sole discretion, deems appropriate. Franchisee shall contribute to HNAF the amount set forth in Appendix C, as may subsequently be modified pursuant to Section 8.E. Hardee's Restaurants operated by HR and its affiliates shall contribute to HNAF on the same basis as comparable franchisees. Unless modified in writing by HR, HNAF contributions are due on the tenth (10th) day of each month.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Hardees Franchise Disclosure Document, the franchisee has a weekly advertising and promotion obligation (APO). The specific amount is detailed in Section 6.C and Appendix C of the franchise agreement. Hardees Restaurants LLC (HR) retains the right to modify the amount and allocation of the APO with written notice to the franchisee, as outlined in Section 8.E. A portion of the APO is directed to the Hardee's National Advertising Fund (HNAF), while the remainder is allocated to a Regional Co-op or spent by the franchisee on local store marketing (LSM), as directed by HR.
The amount contributed to HNAF is specified in Appendix C and can be modified according to Section 8.E. Contributions to HNAF are typically due on the tenth of each month, unless otherwise specified in writing by HR. Hardees restaurants operated by HR and its affiliates contribute to HNAF on the same basis as comparable franchisees, ensuring a consistent contribution structure across the system.
Prospective Hardees franchisees should carefully review Section 6.C and Appendix C of the franchise agreement to understand the exact amount and allocation of their weekly APO. It is also important to understand the conditions under which HR may modify the APO and the requirements for documenting LSM expenditures. Franchisees should also inquire about the existence and requirements of any Regional Co-op in their Designated Market Area (DMA), as this will impact the allocation of their APO. Understanding these obligations is crucial for budgeting and financial planning as a Hardees franchisee.