Are all Checkersrallys franchisees required to contribute to the NPF on the same basis?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the Initial Advertising Deposit described in Item 5, you must contribute to the NPF amounts that are established by us from time to time, not to exceed 3% of Net Sales, which are payable semi-monthly at the same time as the royalty fees due under the Franchise Agreement. As of the issuance date of this Franchise Disclosure Document, you must contribute a monthly advertising fee (currently, 2.65%, but can be increased up to 3.0% of your Net Sales) to the NPF depending on the geographical area where your Franchised Restaurant is located (See Note 5 in Item 6). 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's 2025 Franchise Disclosure Document, franchisees are generally required to contribute to the National Production Fund (NPF) but not always on the same basis. Franchisees contribute a monthly advertising fee to the NPF, which as of the issuance date of the FDD, is currently 2.65% (but can be increased up to 3.0%) of Net Sales. The specific percentage can vary depending on the geographical area where the franchised restaurant is located.
Most domestic Checkersrallys franchisees contribute to the NPF on the same basis. However, there are exceptions for certain Rally's Restaurants operating under older agreements. All company-owned Checkersrallys restaurants also contribute to the NPF on the same basis as franchisees, though Checkersrallys and its affiliates are not obligated to do so consistently throughout the franchise term. Some third-party vendors also contribute to the NPF.
This means that while the standard contribution rate applies to most franchisees, a prospective franchisee should confirm the specific NPF contribution rate applicable to their location. They should also be aware that the contribution rate can be adjusted by Checkersrallys, up to a maximum of 3% of Net Sales. Additionally, it's important to note that Checkersrallys and its affiliates are not obligated to continue contributing to the NPF, which could potentially impact the fund's resources.