Does Checkers have the right to establish local or regional advertising cooperatives?

According to Checkers' 2025 Franchise Disclosure Document, Checkers has the right to establish local and regional advertising cooperatives for Checkers and Rally's Restaurants. These cooperatives cover geographical areas designated by Checkers. The marketing department determines these areas, and Checkers implements a co-op if a percentage of Net Sales from restaurants in the area can buy sufficient rating points in various media, such as television, radio, print, and digital. Checkers has the sole discretion to form, change, dissolve, or merge these advertising cooperatives.

A Checkers franchisee must participate in these advertising cooperatives, adhering to their by-laws and contributing the amounts determined by the cooperative. However, franchisees can choose not to participate in price advertising. The contribution rates for these cooperatives generally range from 0.5% to 1.85% of Net Sales but are subject to change. These contributions are credited toward the 4.5% advertising expenditures 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 cooperatives are independently administered with assistance from Checkers and an outside accounting firm. Decisions are generally made by a majority vote, with one vote per restaurant. Checkers may control the cooperative in areas where company-owned restaurants constitute the majority. Some franchisees, such as those in Walmart stores or Non-Traditional Sites, may have lower contribution levels if permitted by the cooperative's by-laws. The advertising conducted by these cooperatives may use various media, including TV, radio, online video, digital display, and social media, developed by independent advertising firms with Checkers' in-house advertising department's assistance.