If no advertising cooperative exists for a Checkers restaurant's geographic area upon the Effective Date, what percentage of the standard cooperative contribution is the franchisee obligated to contribute to a future cooperative?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
You must contribute such amounts to the advertising cooperative(s) as they determine from time to time in accordance with the cooperative's bylaws, provided that: (i) if no cooperative exists in the geographic area of the Franchised Restaurant upon the Effective Date, then your obligation to contribute to any future cooperative that covers the Franchised Restaurant will require you to contribute only fifty percent (50%) of the then current amount that other members in the cooperative (whose Restaurants are not operating, or to be operated, in a Non-Traditional Site) are obligated to contribute; (ii) if a cooperative exists in the market area of the Premises upon the Effective Date, we will exert our best efforts to ensure that such cooperative revises its bylaws to allow, and/or specifically approves, you to pay a reduced contribution level as specified in subpart (i); and (iii) any such reduction in your cooperative contribution level under the preceding subpart (i) will neither apply to your required participation in any special regional promotion (in which promotion you must fully participate as contemplated below in this Section 10.02), nor reduce your minimum total five percent (5%) combined advertising expenditure obligation described above in this Section 10.02.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if a Checkers franchise is in an area without an existing advertising cooperative on the franchise's effective date, the franchisee's contribution to any future cooperative will be 50% of the amount that other members contribute. This applies only to members whose restaurants are not operating, or to be operated, in a Non-Traditional Site.
This reduced contribution does not apply to required participation in any special regional promotion, where full participation is mandatory. Furthermore, this reduction does not decrease the minimum total advertising expenditure obligation, which is 5% combined advertising expenditure.
This clause ensures that new franchisees in areas without established advertising cooperatives receive some financial relief regarding advertising contributions when a cooperative is eventually formed, while still requiring participation in promotional events and adherence to minimum advertising spending requirements.