Does the reduced cooperative contribution level for a Checkersrallys Non-Traditional Site franchisee apply to special regional promotions?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
You must contribute such amounts to the advertising cooperative(s) as they determine from time to time in accordance with the cooperative's bylaws, provided that: (i) if no cooperative exists in the geographic area of the Franchised Restaurant upon the Effective Date, then your obligation to contribute to any future cooperative that covers the Franchised Restaurant will require you to contribute only fifty percent (50%) of the then current amount that other members in the cooperative (whose Restaurants are not operating, or to be operated, in a Non-Traditional Site) are obligated to contribute; (ii) if a cooperative exists in the market area of the Premises upon the Effective Date, we will exert our best efforts to ensure that such cooperative revises its bylaws to allow, and/or specifically approves, you to pay a reduced contribution level as specified in subpart (i); and (iii) any such reduction in your cooperative contribution level under the preceding subpart (i) will neither apply to your required participation in any special regional promotion (in which promotion you must fully participate as contemplated below in this Section 10.02), nor reduce your minimum total five percent (5%) combined advertising expenditure obligation described above in this Section 10.02.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the reduced cooperative contribution level for Non-Traditional Site franchisees does not apply to special regional promotions. While Non-Traditional Site franchisees may benefit from a reduced contribution to local advertising cooperatives, this reduction does not extend to participation in special regional promotions.
Specifically, Checkersrallys requires full participation in special regional promotions, meaning franchisees must contribute fully as contemplated within section 10.02 of the franchise agreement. This obligation ensures that all franchisees, regardless of their site type, contribute equally to regional marketing efforts during these specific promotional periods.
This requirement is further reinforced by the stipulation that the reduction in cooperative contribution will not reduce the minimum total of five percent combined advertising expenditure obligation. This means that even with a reduced cooperative contribution, franchisees must still meet the overall advertising spending requirement, and participation in special regional promotions is considered separate from this reduced contribution.