Under what condition might Checkers require a franchisee to contribute to an advertising purchasing collective?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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).
Source: Item 6 — OTHER FEES (FDD pages 21–30)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if a franchisee's restaurant is in an area where Checkers has not established an advertising cooperative, Checkers has the option to require the franchisee to contribute to an advertising purchasing collective that Checkers establishes and controls. This contribution would be the difference between the current National Production Fund (NPF) contribution rate and 4.5% of the franchisee's Net Sales.
This advertising purchasing collective may not be governed by by-laws similar to a typical local or regional advertising cooperative, meaning the franchisee may not have voting rights. Alternatively, Checkers could require the franchisee to spend the equivalent amount on local marketing or join a local or regional cooperative created by Checkers, in which case the contribution rate would be determined by the cooperative's by-laws.
For a prospective Checkers franchisee, this means that in areas without an existing advertising cooperative, they may have less control over how their advertising dollars are spent, as Checkers could direct those funds to a purchasing collective managed by them. The franchisee should clarify with Checkers whether their location falls into this category and understand the implications for their advertising strategy and budget.