Are all Checkers franchisees required to contribute to the NPF on the same basis?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the Initial Advertising Deposit described in Item 5, you must contribute to the NPF amounts that are established by us from time to time, not to exceed 3% of Net Sales, which are payable semi-monthly at the same time as the royalty fees due under the Franchise Agreement. As of the issuance date of this Franchise Disclosure Document, you must contribute a monthly advertising fee (currently, 2.65%, but can be increased up to 3.0% of your Net Sales) to the NPF depending on the geographical area where your Franchised Restaurant is located (See Note 5 in Item 6). Other domestic franchisees contribute on the same basis to the NPF, except for certain operators of Rally's Restaurants operating under older forms of agreement. The NPF receives and administers monies from operators of Restaurants. All company-owned Checkers Restaurants and Rally's Restaurants also currently contribute on the same basis as franchisees to the NPF, but we and our affiliates are not obligated to do so (or to continue doing so throughout your franchise term). Some third party vendors also contribute to the NPF. The NPF does not spend any money on advertising that is principally a solicitation for the sale of new franchises. Neither we nor NPF, Inc. are required to spend any amount on advertising in your market area.
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 generally contribute to the National Production Fund (NPF) on the same basis. As of the FDD issuance date, franchisees must contribute a monthly advertising fee to the NPF, which is currently 2.65% of Net Sales but can be increased up to 3.0%. This fee may vary depending on the geographical location of the franchised restaurant. However, there are exceptions, as certain operators of Rally's Restaurants with older agreements may contribute on a different basis. All company-owned Checkers and Rally's Restaurants also contribute to the NPF on the same basis as franchisees, although Checkers and its affiliates are not obligated to continue doing so throughout the franchise term. Some third-party vendors may also contribute to the NPF.
The NPF is used for creating and producing marketing materials and advertising campaigns. The funds are kept separate from Checkers's other funds and are not used for general operating expenses, except for reasonable salaries, administrative costs, and overhead related to administering the NPF. Interest earned on NPF contributions is used to cover costs before using other NPF assets. The NPF may spend more or less than the aggregate contributions in a given year and may borrow or invest funds to cover deficits or surpluses. Checkers will provide an annual unaudited statement of monies collected and costs incurred by the NPF upon written request.
Checkers or NPF, Inc. are not obligated to seek advice from franchisees regarding the creative concepts and media used for NPF-financed programs. However, Checkers may choose to seek such advice and has established a Franchisee Advisory Council that includes a marketing subcommittee. Checkers has the right to change or dissolve these groups. The NPF directs all programs it finances, including the creative concepts, materials, endorsements, and their placement. The NPF may be used to promote other restaurant concepts owned or franchised by Checkers or its affiliates, without liability for the allocation of funds to those concepts. Checkers may terminate or create a new NPF model with 30 days' notice, and unspent monies will be distributed to Checkers and Rally's franchisees, and to Checkers and its affiliates, in proportion to their respective NPF contributions during the preceding 12-month period.