How is the Cooperative Advertising fee determined for a Checkers franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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ITEM 6 OTHER FEES
FRANCHISE AGREEMENT
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (See Note 1) | |---|---|---|---| | Royalty | 4% of your Net Sales | Semi-monthly, | Net Sales is defined in Note 2 | | | or 2% of your Net | on or before the | below. See Note 2 for the | | | Sales if you operate a | 5th and 20th | 2025 Growth Incentive | | | Restaurant from a | day of each | Program and Reimage | | | Non-Traditional Site. | month. | Incentive Program. | | National Production Fund Contributions (See Notes 3 and 4) | You will be required to pay up to 3% of your Net Sales (currently, 2.65% of your Net Sales). | Monthly, on the 5th day of each month. | Varies. The amount is credited toward your 4.5% advertising expenditure requirement. Your contribution rate is subject to change from time to time. | | Cooperative Advertising (See Notes 4 and 5) | Determined by your local or regional advertising cooperative. | Monthly, on the 5th day of each month. | Payments to local or regional advertising cooperatives are credited toward your 4.5% advertising expenditure requirement. |
| TYPE OF FEE Local Advertising Fee (see Notes 5 and 6) | AMOUNT The difference between the current NPF contribution rate and 4.5% of your Net Sales. | DUE DATE Must be spent on advertising and promotion during each of your fiscal quarters. | REMARKS (See Note 1) If your Franchised Restaurant is located in a geographical area where we have not established an advertising cooperative, then, we may require you contribute to an advertising purchasing collective that we establish and control. |
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| Delivery Administration Fee | 2% of the total price charged to a customer that orders certain approved food, beverage and other items ("Delivered Products") from a third-party delivery service provider approved by us (each a "DSP"). | Bi-monthly. |
Source: Item 6 — OTHER FEES (FDD pages 21–30)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the Cooperative Advertising fee is determined by the local or regional advertising cooperative your franchise participates in. These payments are made monthly, typically on the 5th day of each month. These contributions count toward the 4.5% advertising expenditure requirement Checkers mandates.
The decisions regarding the advertising cooperatives are generally made by a majority vote, with each restaurant having one vote. However, Checkers may control the cooperative in areas where company-owned Checkers or Rally's restaurants constitute the majority. Certain critical decisions, such as contribution rate increases, are based on one vote per entity rather than one vote per restaurant. The contribution rates for these cooperatives generally range from 0.5% to 1.85% of Net Sales, but this can vary.
If a Checkers franchise is in an area where an advertising cooperative hasn't been established, Checkers has the option to require the franchisee to spend the difference between the current National Production Fund (NPF) contribution rate and 4.5% of Net Sales on local marketing. Alternatively, Checkers can mandate contributing that difference to an advertising purchasing collective established and controlled by Checkers, or require joining a local or regional cooperative created by Checkers, with the contribution rate determined by the cooperative's bylaws.