What is the general range for advertising cooperative contribution rates for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 5: 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 Checkers Restaurants or Rally's Restaurants constitute the majority. Typically, however, the by-laws require certain votes (e.g., contribution rate increases) to be based on one vote per entity and not one vote per restaurant. The cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales, but may vary. Cooperatives may purchase any media or advertising of their choosing, including home, linear TV, terrestrial/streaming radio, connected TV, online video, digital display, paid search, programmatic digital, and social media. Rate contributions of advertising cooperatives are established by a majority vote of members.
Source: Item 6 — OTHER FEES (FDD pages 21–29)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales, though this amount may vary. These advertising cooperatives, which are made up of Checkersrallys franchisees in a specific region, can purchase various forms of advertising, including TV, radio, online video, and social media. Decisions are typically made by a majority vote, with each restaurant having one vote. However, some decisions, like increasing contribution rates, may be based on one vote per entity, not per restaurant.
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 National Production Fund (NPF) contribution rate and 4.5% of Net Sales on local marketing. Alternatively, Checkersrallys may require the franchisee to contribute that difference to an advertising purchasing collective controlled by Checkersrallys, or to join a local or regional cooperative created by Checkersrallys.
It's important to note that Checkersrallys requires franchisees to spend 4.5% of their Net Sales on advertising and marketing. This includes contributions to the NPF and any regional or local advertising cooperatives. If the cooperative's required contribution rate, when added to the NPF contribution rate, exceeds 4.5%, the franchisee's advertising expenditures may be higher. Franchisees should inquire about the specific advertising cooperative contribution rates in their area and how these rates are determined to fully understand their advertising obligations.