Are the financial statements of the Checkersrallys advertising cooperatives available to franchisees?
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 the 2025 Checkersrallys Franchise Disclosure Document, the financial statements and reports of the advertising cooperatives are available for franchisees to review. The advertising cooperatives are independently administered with the assistance of Checkersrallys and an outside independent accounting firm. The decisions of the advertising cooperatives are generally made by a majority vote, with one vote per restaurant. However, Checkersrallys may control the cooperative in certain areas where company-owned restaurants constitute the majority.
This means that as a Checkersrallys franchisee, you have the right to access the financial records of your local advertising cooperative, allowing you to understand how the cooperative is managing and spending its funds. This transparency is beneficial, as it enables you to assess the effectiveness of the cooperative's advertising efforts and ensure that your contributions are being used appropriately.
However, it's important to note that Checkersrallys retains the right to establish, change, dissolve, or merge advertising cooperatives at its discretion. Additionally, the cooperative contribution rates can range from 0.5% to 1.85% of Net Sales and are subject to change at any time based on the by-laws or the vote of the cooperative members. Some franchisees may contribute at different rates if permitted by the cooperative's rules. Therefore, while you have access to financial statements, the structure and contribution requirements of the cooperative can be altered, potentially impacting your financial obligations and the cooperative's activities.