How are decisions made within Checkers advertising cooperatives?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
The by-laws of your co-op are made available for you to review. The advertising cooperatives are independently administered with our assistance and assistance from an outside independent accounting firm. The financial statements of the advertising cooperatives and reports are available to you. Decisions of advertising cooperatives generally are made by majority vote based on one vote per restaurant. Accordingly, we may control the cooperative in certain areas where company-owned Restaurants constitute the majority. The cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales and they are subject to change at any time pursuant to the by-laws and/or vote of the cooperative or its governing members or executives. Some franchisees in a cooperative may contribute at a rate that varies from the standard contribution rate for the other franchisees in that cooperative if permitted or authorized by the cooperative, pursuant to the by-laws and/or rules of the particular cooperative, and/or by vote of the cooperative or its governing members or executives. By way of example, franchisees of Restaurants operating, or that will operate, within or at Walmart stores or other Non-Traditional Sites (as we may determine, in our sole discretion) may pay a lower contribution level to their local cooperatives than the general membership because, among other reasons, such restaurants often cater to separate customer flow not driven primarily by the promotions and campaigns executed by those franchisees' local cooperatives.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 46–57)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, decisions within advertising cooperatives are generally made by a majority vote, with each restaurant having one vote. However, Checkers retains the ability to control the cooperative's decisions in areas where company-owned restaurants constitute the majority. This means that while franchisees have a voice in the advertising strategies and initiatives within their cooperative, Checkers can exert significant influence or even control in certain situations.
This structure has several implications for franchisees. First, franchisees need to understand the composition of their local advertising cooperative to assess the extent of Checkers's potential influence. If company-owned restaurants form a majority, the franchisee's individual vote may have less impact. Second, franchisees should carefully review the co-op's by-laws, as these govern the cooperative's operations and the rights and responsibilities of its members.
Contribution rates to these cooperatives typically range from 0.5% to 1.85% of Net Sales, but these rates can change based on the by-laws or a vote by the cooperative's members or executives. Some franchisees may contribute at different rates if permitted by the cooperative's rules or by a vote. For example, restaurants in Walmart stores or other non-traditional sites might have lower contribution levels because they cater to different customer flows. Franchisees are required to participate in the advertising cooperatives and adhere to their by-laws, except for price advertising, in which they may choose not to participate.