How is the Local Advertising Fee amount calculated for a Checkers franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE Local Advertising Fee (see Notes 5 and 6) | AMOUNT The difference between the current NPF contribution rate and 4.5% of your Net Sales. | DUE DATE Must be spent on advertising and promotion during each of your fiscal quarters. | REMARKS (See Note 1) If your Franchised Restaurant is located in a geographical area where we have not established an advertising cooperative, then, we may require you contribute to an advertising purchasing collective that we establish and control. | |-----------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| NOTE 3: We require you to spend 4.5% of your Net Sales on advertising and marketing your Franchised Restaurant, which includes your NPF contribution, your contribution to a regional or local advertising cooperative, and amounts you spend marketing your Franchised Restaurant in your local market or that we require you to contribute to an advertising purchasing collective that we establish and control. Your advertising expenditures may exceed 4.5% of your Net Sales if you are a member of a regional or local advertising cooperative whose required contribution rate, when added to your NPF contribution rate, exceeds 4.5%. NOTE 4: The current NPF contribution rate is 2.65% of your Net Sales. NOTE 6: If your Franchised Restaurant is located in a geographical area where we have not established an advertising cooperative, then, at our option, you will be required to either (i) spend the difference between the current NPF contribution rate and 4.5% of your Net Sales marketing your Franchised Restaurant in your local market, (ii) contribute the difference between the current NPF contribution rate and 4.5% of your Net Sales to an advertising purchasing collective that we establish and control (which may not be governed by by-laws similar to a typical local or regional advertising cooperative where you will have voting rights), or (iii) join a local or regional cooperative that we create in your designated marketing area (in which case your contribution rate will be determined by the cooperative in accordance with its by-laws).
In addition, if we provide you and any local or regional advertising cooperative with 90 days' notice of a special regional promotion, you must participate in the promotion and pay us any regional advertising fees beginning on the effective date of the notice and continuing until the regional promotion ends. Any special regional advertising fees will be in addition to, and not credited towards, the minimum 4.5% advertising expenditure we currently require you to make.
Source: Item 6 — OTHER FEES (FDD pages 21–30)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the Local Advertising Fee is calculated as the difference between the current National Production Fund (NPF) contribution rate and 4.5% of your Net Sales. This fee must be spent on advertising and promotion during each fiscal quarter.
As of the FDD date, the current NPF contribution rate is 2.65% of Net Sales. Therefore, if a Checkers franchisee is not part of an advertising cooperative, they would need to spend the difference between 4.5% and 2.65% (which is 1.85%) of their Net Sales on local advertising.
If the Checkers restaurant is in an area without an advertising cooperative, Checkers may require the franchisee to contribute to an advertising purchasing collective that Checkers establishes and controls. Alternatively, Checkers may allow the franchisee to market their restaurant locally by spending the required amount on local advertising. The franchisee may also be required to join a local or regional cooperative that Checkers creates in their designated marketing area, in which case the contribution rate will be determined by the cooperative in accordance with its by-laws. Franchisees should note that special regional promotions may require additional advertising fees.