Can the cooperative contribution rates for Checkersrallys change?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
The by-laws of your co-op are made available for you to review. The advertising cooperatives are independently administered with our assistance and assistance from an outside independent accounting firm. The financial statements of the advertising cooperatives and reports are available to you. Decisions of advertising cooperatives generally are made by majority vote based on one vote per restaurant. Accordingly, we may control the cooperative in certain areas where company-owned Restaurants constitute the majority. The cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales and they are subject to change at any time pursuant to the by-laws and/or vote of the cooperative or its governing members or executives. Some franchisees in a cooperative may contribute at a rate that varies from the standard contribution rate for the other franchisees in that cooperative if permitted or authorized by the cooperative, pursuant to the by-laws and/or rules of the particular cooperative, and/or by vote of the cooperative or its governing members or executives. By way of example, franchisees of Restaurants operating, or that will operate, within or at Walmart stores or other Non-Traditional Sites (as we may determine, in our sole discretion) may pay a lower contribution level to their local cooperatives than the general membership because, among other reasons, such restaurants often cater to separate customer flow not driven primarily by the promotions and campaigns executed by those franchisees' local cooperatives.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 46–57)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the cooperative contribution rates are subject to change. The contribution rates generally range from 0.5% to 1.85% of Net Sales. These rates can change at any time based on the cooperative's by-laws or a vote by its members or executives. This means that the amount a franchisee contributes to the advertising cooperative can fluctuate.
Some Checkersrallys franchisees may have different contribution rates than others within the same cooperative. This can occur if the cooperative permits or authorizes it, according to its by-laws or rules, or by a vote of the cooperative's members or executives. For instance, franchisees operating within Walmart stores or other non-traditional sites may pay a lower contribution due to catering to a different customer base not primarily driven by the cooperative's promotions.
For a prospective Checkersrallys franchisee, this means that advertising costs could vary over time and may differ from other franchisees in the same market. It is important to review the cooperative's by-laws and financial statements to understand how these changes are determined and to assess the potential impact on your restaurant's advertising expenses. Franchisees should also inquire about the voting structure of the cooperative to understand their influence on these decisions.