How is the Local Advertising Fee determined for a Checkersrallys franchise?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (See Note 1) |
|---|---|---|---|
| Local Advertising Fee (see Notes 5 and 6) | The difference between the current NPF contribution rate and 4.5% of your Net Sales. | Must be spent on advertising and promotion during each of your fiscal quarters. | If your Franchised Restaurant is located in a geographical area where we have not established an advertising cooperative, then, we may require you contribute to an advertising purchasing collective that we establish and control. |
NOTE 3: We require you to spend 4.5% of your Net Sales on advertising and marketing your Franchised Restaurant, which includes your NPF contribution, your contribution to a regional or local advertising cooperative, and amounts you spend marketing your Franchised Restaurant in your local market or that we require you to contribute to an advertising purchasing collective that we establish and control. Your advertising expenditures may exceed 4.5% of your Net Sales if you are a member of a regional or local advertising cooperative whose required contribution rate, when added to your NPF contribution rate, exceeds 4.5%.
NOTE 4: The current NPF contribution rate is 2.65% of your Net Sales.
Source: Item 6 — OTHER FEES (FDD pages 21–29)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the Local Advertising Fee is determined by the difference between the current National Production Fund (NPF) contribution rate and 4.5% of your Net Sales. This fee must be spent on advertising and promotion during each fiscal quarter. Currently, the NPF contribution rate is 2.65% of Net Sales. Therefore, if a Checkersrallys franchisee is required to pay a Local Advertising Fee, they will pay the difference between 2.65% and 4.5% of Net Sales.
If Checkersrallys has not established an advertising cooperative in the franchisee's geographical area, Checkersrallys may require the franchisee to contribute to an advertising purchasing collective that Checkersrallys establishes and controls.
It's important to note that franchisees are required to spend 4.5% of Net Sales on advertising and marketing, which includes the NPF contribution, contributions to regional or local advertising cooperatives, and amounts spent marketing the franchise in the local market or contributed to an advertising purchasing collective controlled by Checkersrallys. Advertising expenditures may exceed 4.5% of Net Sales if the regional or local advertising cooperative's required contribution rate, when added to the NPF contribution rate, exceeds 4.5%.