Are Checkers Western Licensees obligated to contribute to the NPF or an advertising cooperative?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 4: The current NPF contribution rate is 2.65% of your Net Sales. As noted in Item 1, the Western Licensees operate under a different form of agreement. The Western License Agreement provides that the Western Licensees must pay a 1% royalty, but each Western Licensee has no obligation to contribute to NPF or to an advertising cooperative. We are not obligated to provide certain advertising and marketing support to Western Licensees.
Source: Item 6 — OTHER FEES (FDD pages 21–30)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Western Licensees have specific financial obligations that differ from standard franchisees. The key distinction is that while Western Licensees must pay a 1% royalty fee, they are not required to contribute to the National Production Fund (NPF) or any advertising cooperative. This could mean lower advertising costs for these franchisees. However, Checkers is also not obligated to provide the same level of advertising and marketing support to Western Licensees as they do to other franchisees. This could impact the franchisee's marketing strategies and potentially require them to take on more local advertising responsibilities.
For a prospective Checkers Western Licensee, this arrangement presents both potential benefits and risks. The absence of mandatory contributions to the NPF or advertising cooperatives could free up capital for other business needs or local marketing initiatives. However, the reduced support from Checkers means that Western Licensees must be prepared to develop and execute their own marketing plans to attract and retain customers. This requires a strong understanding of the local market and effective advertising strategies.
It's important for potential Western Licensees to carefully consider the implications of this arrangement. While the lower fees might seem attractive, the reduced support from Checkers could place a greater burden on the franchisee to drive sales and build brand awareness in their territory. Therefore, a comprehensive marketing plan and budget should be developed to ensure the success of the franchise. Prospective franchisees should discuss with Checkers what specific advertising and marketing support will be provided to Western Licensees and what additional resources they can access.