Can Checkers furnish marketing, advertising, and promotional materials to franchisees at cost?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to spend on advertising and promoting the Franchised Restaurant such amounts as we establish at any time and from time to time. We require you to spend a minimum of four and one-half percent (4.5%) of
Net Sales during each of your fiscal quarters on advertising and promoting the Franchised Restaurant, however, your advertising spending could exceed this amount if you are a member of a local or regional advertising cooperative whose required contribution rate, when added to your required advertising spending obligations (including contributions to the NPF), exceeds four and one-half percent For these purposes, we will credit the following types of (4.5%) of Net Sales. advertising expenditures toward this requirement: (a) amounts contributed to the NPF (other than the Initial Advertising Deposit); (b) amounts contributed to an advertising cooperative or an advertising purchasing collective; and (c) amounts spent for advertising and promoting your Franchised Restaurant media, such as television, radio, newspaper, billboards, posters, direct mail, yellow pages, collateral promotional and novelty items (e.g. Checkers taxicabs), advertising on public vehicles, such as cabs and buses, and, if not provided by us, the cost of producing approved materials necessary to participate in these media. expenditures do not include amounts spent for items which we, in our reasonable judgment, deem inappropriate for meeting the minimum advertising requirement, including permanent on-premises signs and menu boards, lighting, menus, vehicle maintenance (even though such vehicles may display the Marks), premiums, discounts, free offers, and employee incentive programs.
You must submit to us for our prior approval, samples of all advertising and promotional materials not prepared or previously approved by us and which vary from our standard advertising and promotional materials. You may not use any advertising or promotional materials that we have disapproved.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Checkers franchisees are required to spend a minimum of 4.5% of Net Sales during each fiscal quarter on advertising and promoting their franchised restaurant. This spending can be allocated to various advertising expenditures. These expenditures include contributions to the National Promotion Fund (NPF), advertising cooperatives, or advertising purchasing collectives. Additionally, franchisees can use the funds for media such as television, radio, newspaper, billboards, posters, direct mail, yellow pages, and promotional items. The cost of producing approved materials necessary to participate in these media can also be credited toward the advertising requirement if not provided by Checkers.
However, certain expenditures are not included in meeting the minimum advertising requirement. These include permanent on-premises signs and menu boards, lighting, menus, vehicle maintenance, premiums, discounts, free offers, and employee incentive programs. Franchisees must submit samples of all advertising and promotional materials not prepared or previously approved by Checkers for prior approval. Franchisees cannot use any advertising or promotional materials that Checkers has disapproved.
The FDD does not explicitly state that Checkers will furnish marketing, advertising, and promotional materials to franchisees at cost. However, it does state that the cost of producing approved advertising materials can be credited toward the 4.5% advertising expenditure requirement if Checkers does not provide them. This implies that Checkers may provide some standard advertising materials, but franchisees may need to source additional materials themselves, subject to Checkers' approval.