How are decisions made in Checkersrallys advertising cooperatives?
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, decisions within the advertising cooperatives are generally determined by a majority vote, with each restaurant holding one vote. This means that the more restaurants a member owns, the more influence they have in the cooperative's decisions. However, Checkersrallys may exert control over the cooperative's decisions in areas where company-owned restaurants constitute the majority.
This structure has implications for franchisees. While it allows for collective decision-making regarding advertising strategies and expenditures, the influence of individual franchisees can vary significantly based on the number of restaurants they operate and the presence of company-owned restaurants in the cooperative. Franchisees should be aware that Checkersrallys's corporate presence could potentially outweigh the collective voting power of individual franchisees.
The contribution rates to these cooperatives typically range from 0.5% to 1.85% of Net Sales, but these rates can change based on the cooperative's by-laws or a vote by its members or executives. Some franchisees may contribute at different rates if permitted by the cooperative's rules, such as those operating in non-traditional locations like Walmart stores, who may pay a lower rate due to differing customer flows. Franchisees are required to participate in the advertising cooperatives and adhere to their by-laws, except for price advertising, in which they may choose not to participate.
Prospective franchisees should carefully review the by-laws of their local advertising cooperative to understand the specific rules and decision-making processes. They should also consider the potential impact of Checkersrallys's company-owned restaurants on the cooperative's decisions and how their individual vote might influence the cooperative's advertising strategies. Understanding these dynamics is crucial for franchisees to effectively participate in and benefit from the advertising cooperative.