What is a Checkers franchisee's obligation regarding contributions to the advertising cooperative?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
combination. We have the right in our sole discretion to form, change, dissolve or merge advertising cooperatives.
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
are credited toward the 4.5% advertising expenditures required by the Franchise Agreement; however, if we provide you and your local and/or regional advertising cooperative 90 days' notice of a special promotion, you must participate in such promotion and pay to us any advertising fees assessed in connection with the promotion, beginning on the effective date of such notice and continuing until such promotion is concluded. Any such regional advertising fees shall be in addition to, and not credited towards, the 4.5% advertising expenditure required by the Franchise Agreement.
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, franchisees must participate in advertising cooperatives and their programs, adhering to the co-op's bylaws. The amount a franchisee contributes is determined by the advertising cooperative and can change over time according to its bylaws. However, franchisees can opt out of price advertising. Checkers may try to work with the cooperative to adjust bylaws for certain members, like those in non-traditional locations, to allow varied participation or contribution levels. Any 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, where fees are in addition to the standard 4.5% advertising expenditure. 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 may have different contribution rates if authorized by the cooperative, such as those in Walmart stores or non-traditional sites, who may pay less due to catering to different customer flows. Franchisees should review the co-op's bylaws, which are available for review, and financial statements. The advertising cooperatives are independently administered with assistance from Checkers and an outside accounting firm. Decisions are generally made by majority vote, with one vote per restaurant; Checkers may control the cooperative in areas where company-owned restaurants are the majority.
If a Checkers franchisee's combined 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 at their own expense and send monthly reports of their marketing expenditures to Checkers. Checkers isn't obligated to maintain any advertising program or spend any amount in the franchisee's area but can require franchisees to use specific suppliers for local advertising.