How are the costs for Marketing, Advertising, Promotional and Point-of-Purchase materials determined for a Checkersrallys franchise?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (See Note 1) |
|---|---|---|---|
| Local Advertising Fee (see Notes 5 and 6) | The difference between the current NPF contribution rate and 4.5% of your Net Sales. | Must be spent on advertising and promotion during each of your fiscal quarters. | If your Franchised Restaurant is located in a geographical area where we have not established an advertising cooperative, then, we may require you contribute to an advertising purchasing collective that we establish and control. |
| Delivery Administration Fee | 2% of the total price charged to a customer that orders certain approved food, beverage and other items ("Delivered Products") from a third-party delivery service provider approved by us (each a "DSP"). | Bi-monthly. | Payable only if you are eligible to provide delivery services, elect to provide delivery and enter into the delivery services participation agreement (the "Delivery Program"). See Note 7. |
| Order Ahead Program Administration Fee | 2% of the total price charged to a customer that orders certain approved food, beverage and other items (the "Order Ahead Products") from our optional "Order Ahead Program." | Bi-monthly. | Payable only if you are eligible and elect to enter the Order Ahead Program, which allows customers to pre-order the Order Ahead Products for pick-up from Restaurants. See Note 8. |
| Marketing, Advertising, Promotional and Point-of-Purchase ("POP") Materials | Actual costs, which may vary per Restaurant based on merchandising capacity and the materials you request. | Payable monthly. | Advertising materials not prepared by us must be submitted for approval prior to distribution. |
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (See Note 1)
Source: Item 6 — OTHER FEES (FDD pages 21–29)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the costs for Marketing, Advertising, Promotional and Point-of-Purchase ("POP") Materials are based on actual costs. These costs may vary per restaurant depending on the merchandising capacity and the specific materials requested by the franchisee. These costs are payable monthly. Checkersrallys also requires that any advertising materials not prepared by them must be submitted for approval before distribution.
In addition to these direct costs, Checkersrallys franchisees are required to spend 4.5% of their Net Sales on advertising and marketing. This expenditure includes contributions to the National Production Fund (NPF), regional or local advertising cooperatives, and any amounts spent on local marketing. The NPF contribution is currently 2.65% of Net Sales, but this rate is subject to change. Franchisees should note that their total advertising expenditure may exceed 4.5% of Net Sales if the contribution rate required by their regional or local advertising cooperative, when combined with the NPF contribution, surpasses this threshold.
If a Checkersrallys restaurant is in an area without an advertising cooperative, Checkersrallys has the option to require the franchisee to spend the difference between the current NPF contribution rate and the 4.5% advertising expenditure requirement on local marketing. Alternatively, Checkersrallys may require the franchisee to contribute this difference to an advertising purchasing collective controlled by Checkersrallys, or to join a local or regional cooperative created by Checkersrallys, in which case the contribution rate will be determined by the cooperative's by-laws. Franchisees should be aware that Checkersrallys may control advertising cooperatives in certain areas where company-owned restaurants constitute the majority, although contribution rate increases typically require votes based on one vote per entity rather than one vote per restaurant.
Prospective Checkersrallys franchisees should carefully consider these advertising and marketing costs, as they can significantly impact their overall expenses. It is important to understand the specific requirements and options available in their designated marketing area, as well as the potential for these costs to fluctuate based on cooperative decisions and changes in the NPF contribution rate. Additionally, franchisees should factor in the time and effort required to develop and submit advertising materials for approval, ensuring compliance with Checkersrallys's standards.