How does Checkersrallys account for advertising costs related to on-air advertising?

According to Checkersrallys's 2025 Franchise Disclosure Document, the company expenses advertising costs for on-air advertising the first time the advertisement is aired. Checkersrallys also expenses advertising costs for on-lot merchandising on the first day of advertising. Contributions to independent advertising cooperatives are expensed as they are incurred.

This accounting practice means that Checkersrallys recognizes the entire cost of the on-air advertising campaign as an expense in the period it first airs, rather than spreading the cost over the duration of the campaign. This could potentially impact the company's profitability in the short term, depending on the scale and frequency of its advertising efforts.

For a prospective franchisee, this accounting method used by Checkersrallys provides transparency into how advertising expenses are managed and reported in the company's financial statements. Franchisees can gain insight into the financial implications of advertising activities and how they may affect the company's overall financial performance.