What is the typical voting structure for decisions made by Checkers advertising cooperatives?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 5: Decisions of advertising cooperatives generally are made by majority vote based on one vote per restaurant. Accordingly, we may control the cooperative in certain areas where company-owned Checkers Restaurants or Rally's Restaurants constitute the majority. Typically, however, the by-laws require certain votes (e.g., contribution rate increases) to be based on one vote per entity and not one vote per restaurant. The cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales, but may vary. Cooperatives may purchase any media or advertising of their choosing, including home, linear TV, terrestrial/streaming radio, connected TV, online video, digital display, paid search, programmatic digital, and social media. Rate contributions of advertising cooperatives are established by a majority vote of members.
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' 2025 Franchise Disclosure Document, decisions within advertising cooperatives are generally determined by a majority vote, with each restaurant holding one vote. This structure could allow Checkers, if it owns a majority of restaurants in a specific area, to control the cooperative's decisions. However, the bylaws typically require that certain critical votes, such as those concerning contribution rate increases, are based on one vote per entity rather than one vote per restaurant.
The cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales, but may vary. These cooperatives have the autonomy to purchase various forms of media and advertising, including home, linear TV, terrestrial/streaming radio, connected TV, online video, digital display, paid search, programmatic digital, and social media.
It's important to note that Checkers requires franchisees and any local or regional advertising cooperative to participate in special regional promotions if they are given 90 days' notice. Franchisees must pay any regional advertising fees associated with these promotions, which are in addition to the minimum 4.5% advertising expenditure that Checkers requires. If a Checkers restaurant is in an area without an advertising cooperative, Checkers has the option to require the franchisee to spend the difference between the current NPF contribution rate and 4.5% of Net Sales on local marketing, contribute it to an advertising purchasing collective controlled by Checkers, or join a local or regional cooperative created by Checkers.