Hi, I'm not very familiar with Yoast Local, but if their post type is public then you should be able to go to Toolset > Post Types, edit the post type, and set hierarchical property there. However, some plugins create their own custom post types that are private, and Toolset does not support modifying those post types. I think the Yoast Local support team is the best source of information about this.
$args['hierarchical'] = true;
Keep in mind that parent / child post relationships in Toolset are not the same as hierarchical post types. Toolset relationships are between different post types. Hierarchical relationships are between posts in the same post type, like Pages in WordPress.
Yoast actually said this was not possible to do, but a developer of a permalinks plugin I'm using did create a solution. The solution works for both the url and the breadcrumbs. I'm happy to reference him if you like.
This ticket is now closed. If you're a WPML client and need related help, please open a new support ticket.