HG & Local merchandise is based on the proportion of your team's salaries from home grown and local player, and is a bonus to your Team Sales base merchandise.
The estimate I've always used (which is close but not exact) is that Local (same nation as your team but not drafted by your team) salaries count 1x and Homegrown salaries count 1.5x in the numerator, and then divide by your team's total salaries to get the HG&L merch scale
So if you have 100k in total salaries
50k from local players
30k from homegrown players
20k from foreign players
Then the factor would be (50k + 30k * 1.5) / (100k) = 0.95.
And if you had 20k Team Sales, then the HG&L merch would be approximately 19k.
I know from actual data with my team that the estimate this comes up with isn't exactly right (it's usually slightly low for my team), but it's a close enough estimate to give you an idea to budget with.