Towards what expenditure requirement are the Cooperative Advertising payments credited for Checkers franchisees?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (See Note 1) | |---|---|---|---| | Royalty | 4% of your Net Sales | Semi-monthly, | Net Sales is defined in Note 2 | | | or 2% of your Net | on or before the | below. See Note 2 for the | | | Sales if you operate a | 5th and 20th | 2025 Growth Incentive | | | Restaurant from a | day of each | Program and Reimage | | | Non-Traditional Site. | month. | Incentive Program. | | National Production Fund Contributions (See Notes 3 and 4) | You will be required to pay up to 3% of your Net Sales (currently, 2.65% of your Net Sales). | Monthly, on the 5th day of each month. | Varies. The amount is credited toward your 4.5% advertising expenditure requirement. Your contribution rate is subject to change from time to time. | | Cooperative Advertising (See Notes 4 and 5) | Determined by your local or regional advertising cooperative. | Monthly, on the 5th day of each month. | Payments to local or regional advertising cooperatives are credited toward your 4.5% advertising expenditure requirement. |
| 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.
Source: Item 6 — OTHER FEES (FDD pages 21–30)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, payments made by franchisees to local or regional advertising cooperatives are credited toward the 4.5% advertising expenditure requirement. This means that if a Checkers franchisee is required to spend 4.5% of their net sales on advertising, the amount they contribute to their local or regional advertising cooperative will count towards fulfilling that obligation.
This arrangement benefits franchisees by allowing them to pool their advertising funds with other franchisees in their area, potentially leading to more effective and coordinated advertising campaigns. It also provides a mechanism for local franchisees to have a say in how advertising dollars are spent in their specific market. However, the FDD also notes that Checkers may control the cooperative in certain areas where company-owned Checkers or Rally's Restaurants constitute the majority.
It's important to note that if Checkers provides franchisees and any local or regional advertising cooperative with 90 days' notice of a special regional promotion, franchisees must participate in the promotion and pay any regional advertising fees. These special regional advertising fees are in addition to, and not credited towards, the minimum 4.5% advertising expenditure requirement. Franchisees should carefully review the cooperative's by-laws and contribution rates to fully understand their obligations and rights.