Are Checkersrallys company-owned restaurants required to contribute to the advertising cooperative on the same basis as franchisees?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Other domestic franchisees contribute on the same basis to the NPF, except for certain operators of Rally's Restaurants operating under older forms of agreement. The NPF receives and administers monies from operators of Restaurants. All company-owned Checkers Restaurants and Rally's Restaurants also currently contribute on the same basis as franchisees to the NPF, but we and our affiliates are not obligated to do so (or to continue doing so throughout your franchise term). Some third party vendors also contribute to the NPF.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 46–57)
What This Means (2025 FDD)
According to Checkersrallys' 2025 Franchise Disclosure Document, company-owned restaurants contribute to the National Production Fund (NPF) on the same basis as franchisees. The contribution is a monthly advertising fee, currently at 2.65% of Net Sales, but it can increase up to 3.0%, depending on the restaurant's geographical area. However, Checkersrallys and its affiliates are not obligated to continue this contribution throughout the franchise term. This NPF is used for creating marketing materials and advertising campaigns.
Franchisees are required to participate in advertising cooperatives and their programs, contributing amounts determined by the cooperative's by-laws. These contributions are credited toward the 4.5% advertising expenditures required by the Franchise Agreement. However, Checkersrallys can require participation in special promotions with additional advertising fees.
Company-owned restaurants located in a designated local or regional area will contribute to the advertising cooperative on the same basis as franchisees. This ensures that company-owned locations share the responsibility of local advertising efforts. The cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales and are subject to change. Franchisees operating in non-traditional sites, such as Walmart stores, may contribute at a lower rate to their local cooperatives.