Are company-owned Checkersrallys restaurants obligated to contribute to the NPF?

According to Checkersrallys's 2025 Franchise Disclosure Document, all company-owned Checkers and Rally's Restaurants currently contribute to the National Production Fund (NPF) on the same basis as franchisees. However, Checkersrallys and its affiliates are not obligated to do so, nor are they required to continue contributing throughout the franchisee's term. This means that while company-owned restaurants currently support the NPF, Checkersrallys retains the right to change this policy at any time.

The NPF is used for the creation and production of marketing materials and advertising campaigns. Franchisees are required to contribute to the NPF, with the amount determined by Checkersrallys, but not exceeding 3% of Net Sales. As of the issuance date of the 2025 Franchise Disclosure Document, the monthly advertising fee is 2.65% of Net Sales but can be increased up to 3.0%, depending on the restaurant's geographical area.

This policy has implications for prospective franchisees. While company-owned restaurants currently contribute to the NPF, franchisees should be aware that this could change, potentially shifting a greater burden of advertising costs onto the franchisees. It is important for potential franchisees to consider this when evaluating the financial obligations and potential risks associated with investing in a Checkersrallys franchise. Understanding the franchisor's flexibility in contributing to the NPF is crucial for assessing the long-term financial planning and marketing support available to franchisees.