Is Checkersrallys obligated to ensure that each Restaurant benefits directly or pro-rata from advertising placed by the National Promotion Fund?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Although the NPF is intended to maximize general recognition and patronage of the Marks for the benefit of all Restaurants, we cannot assure you that any particular Restaurant will benefit directly or pro-rata from the placement of advertising. The NPF may be used to pay for the cost of preparing and producing materials and campaigns we select, including video, audio and written advertising and point-of-purchase ("POP") materials, and for the cost of employing advertising agencies, in house staff and supporting market research activities. We may furnish
you with marketing, advertising and promotional materials (including POP materials) at cost, plus any related administrative, shipping, handling and storage charges. These costs may vary based on individual Restaurants and their merchandising capacity.
The NPF will be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for reasonable salaries, administrative costs and overhead we may incur in activities related to the administration of the NPF and its programs, including conducting market research, preparing marketing materials and advertising campaigns and collecting and accounting for contributions to the NPF. We will use all interest earned on NPF contributions to pay costs before using the NPF's other assets. We may spend in any fiscal year an amount greater or less than the aggregate contributions of all Restaurants to the NPF in that year, and the NPF may borrow from us or other lenders (paying reasonable interest) to cover deficits in the NPF, or invest any surplus for future use by the NPF. We will prepare annually a statement of monies collected and costs incurred by the NPF and furnish you a copy upon your written request.
We have the right, but no obligation, to use collection agents and institute legal proceedings to collect NPF contributions at the NPF's expense. We also may forgive, waive, settle, and compromise all claims by or against the NPF. Except as otherwise expressly provided in this Section, we assume no direct or indirect liability or obligation with respect to the maintenance, direction or administration of the NPF. We do not act as trustee or in any other fiduciary capacity with respect to the NPF.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys does not guarantee that each restaurant will directly or proportionally benefit from advertising funded by the National Production Fund (NPF). While the NPF aims to enhance brand recognition and customer traffic for all restaurants, Checkersrallys cannot assure specific benefits for each location.
The NPF is used to cover various costs, including the creation and production of advertising materials (video, audio, written, and point-of-purchase), employing advertising agencies and in-house staff, and supporting market research. Franchisees may purchase marketing materials from Checkersrallys at cost, plus associated administrative, shipping, handling, and storage charges, which can vary depending on the restaurant's merchandising capacity.
The funds collected for the NPF are kept separate from Checkersrallys's general operating funds and are not used for the company's general expenses, except for reasonable salaries, administrative costs, and overhead related to managing the NPF. Interest earned on NPF contributions is used to cover costs before using other NPF assets. Checkersrallys has the flexibility to spend more or less than the total contributions in any fiscal year and may borrow or invest funds to manage deficits or surpluses. Franchisees are entitled to receive an annual statement of monies collected and costs incurred by the NPF upon written request.
Checkersrallys retains the right, but not the obligation, to pursue legal action to collect NPF contributions and may also resolve claims involving the NPF. The company assumes no direct or indirect liability for the NPF's maintenance, direction, or administration and does not act as a trustee or fiduciary concerning the NPF.