What are the specific obligations of a Checkers franchisee regarding the marketing and advertising of their restaurant, considering both Item 8 and Item 9?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
l documents of the NPF.
Notwithstanding anything to the contrary contained herein, the NPF may be used to promote other restaurant concepts that we or any of our Affiliates own or franchise (including [INSERT OPPOSITE BRAND: "Checkers"/"Rally's")]. We shall have no liability for the allocation of funds of NPF to any such other restaurant concepts.
10.02 Your Advertising. 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.
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, franchisees have specific obligations regarding marketing and advertising. Item 9 generally refers to obligations related to advertising, and Section 10 of the Franchise Agreement outlines these obligations in detail.
Specifically, Checkers requires franchisees to spend a minimum of 4.5% of their Net Sales during each fiscal quarter on advertising and promoting their restaurant. This spending can be allocated to several areas, including contributions to the National Production Fund (NPF), advertising cooperatives, or direct advertising expenditures. Direct advertising can include various media, such as television, radio, newspapers, billboards, direct mail, and promotional items. However, Checkers has the discretion to deem certain expenditures as inappropriate for meeting the minimum advertising requirement, such as permanent on-premises signs, menu boards, lighting, and employee incentive programs.
Checkers franchisees must submit all advertising and promotional materials that have not been previously approved and that vary from Checkers's standard materials for prior approval. Franchisees are prohibited from using any advertising or promotional materials that Checkers has disapproved. The NPF may be used to promote other restaurant concepts that Checkers or its affiliates own or franchise, and Checkers has no liability for the allocation of funds of NPF to any such other restaurant concepts.