Can a Checkers franchisee choose not to participate in price advertising within the cooperative?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
You must participate in such advertising cooperatives and its programs (other than price advertising, as to which you may choose not to participate) and abide by its by-laws. You must contribute such amounts to the advertising cooperative(s) as they determine from time to time in accordance with their by-laws. In circumstances that reasonably may warrant varied participation or contribution levels among certain members (for example, restaurants at Non-Traditional Sites that generally receive less benefit from a cooperative's local advertising), we may attempt to work with the cooperative's membership to revise its by-laws or other policies, as we deem appropriate. Any Restaurants owned by us or any of our affiliates located in such designated local or regional area(s) will contribute to the cooperative(s) on the same basis. Contributions to local and regional advertising 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, franchisees must participate in advertising cooperatives and their programs but have the option to opt out of price advertising. Franchisees are required to contribute to these cooperatives, with the amounts determined by the cooperative's by-laws. However, Checkers may attempt to work with the cooperative to adjust participation or contribution levels for certain members, such as those at Non-Traditional Sites, who may not benefit as much from local advertising. Restaurants owned by Checkers or its affiliates in the same area will contribute to the cooperative on the same basis as franchisees.
These contributions to local and regional advertising cooperatives are credited toward the 4.5% advertising expenditure required by the Franchise Agreement. However, Checkers can require participation in special promotions with 90 days' notice, in which case franchisees must pay any advertising fees associated with the promotion, and these fees will not be credited towards the 4.5% advertising expenditure. The advertising cooperatives are independently administered with assistance from Checkers and an outside accounting firm, and their financial statements are available for review. Decisions are generally made by majority vote, with one vote per restaurant, which means Checkers may control the cooperative in areas where company-owned restaurants constitute the majority.
Cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales and can change according to the cooperative's by-laws or a vote by its members. Some franchisees, such as those at Walmart stores or other Non-Traditional Sites, may contribute at a different rate if permitted by the cooperative. If a franchisee's contributions to the National Production Fund (NPF) and local/regional advertising cooperative are less than 4.5% of Net Sales, they must spend the difference on local advertising. Alternatively, Checkers may require contributions to an advertising purchasing collective that Checkers establishes and controls. Franchisees must participate in all required advertising, promotional, and marketing programs and provide monthly reports of their marketing expenditures. Checkers is not obligated to maintain any advertising program or spend any amount on advertising in the franchisee's area but can require the use of specific suppliers for local advertising.