If Checkersrallys requires me to contribute to an advertising purchasing collective, what information will Checkersrallys provide me?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
If your Franchised Restaurant is located in a geographical area where we have not established an advertising cooperative, then, at our option, you will be required to either (i) spend the difference between the current NPF contribution rate and 4.5% of your Net Sales marketing your Franchised Restaurant in your local market, (ii) contribute to an advertising purchasing collective that we establish and control (which may not be governed by by-laws similar to a typical local or regional advertising cooperative where you will have voting rights), or (iii) join a local or regional cooperative that we create in your designated marketing area. If we require you to contribute to an advertising purchasing collective, we will provide you with an accounting of the amount spent in your designated marketing area.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if your restaurant is in an area without an advertising cooperative, Checkersrallys has the option to require you to contribute to an advertising purchasing collective that they establish and control. Unlike a typical advertising cooperative, this collective may not have by-laws that grant you voting rights. If Checkersrallys requires you to contribute to this type of collective, they will provide you with an accounting of the amount spent in your designated marketing area.
This means that while you are obligated to contribute to the advertising purchasing collective, Checkersrallys retains control over how the funds are spent. The accounting provided will give you some visibility into how your contributions are being utilized within your specific market. However, you may not have the same level of influence or input as you would in a traditional advertising cooperative with by-laws and voting rights.
As a prospective franchisee, it's important to understand the implications of contributing to an advertising purchasing collective versus a cooperative. While both require financial contributions, the level of control and influence you have over the advertising strategies can differ significantly. You should inquire with Checkersrallys about their criteria for establishing a purchasing collective versus a cooperative, and how they determine the designated marketing area for accounting purposes. Understanding these factors will help you assess the potential impact on your restaurant's marketing efforts and overall profitability.