Can Checkersrallys require franchisees to participate in marketing and promotional campaigns?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
and menu boards, lighting, menus, vehicle maintenance (even though such vehicles may display the Marks), premiums, discounts, free offers, and employee incentive programs.
You must submit to us for our prior approval, samples of all advertising and promotional materials not prepared or previously approved by us and which vary from our standard advertising and promotional materials. You may not use any advertising or promotional materials that we have disapproved.
We have the right to establish local and/or regional advertising cooperatives for "Checkers" and/or "Rally's" restaurants in your local or regional area, covering such geographical areas as we may designate at any time and from time to time. You must participate in such advertising cooperative and its programs (other than price advertising, as to which you may choose not to participate) and abide by its by-laws. You must contribute such amounts to the advertising cooperative(s) as they determine at any time and from time to time in accordance with their by-laws. Any Restaurants owned by us or any of our Affiliates located in such designated local or regional area(s) will contribute to the cooperative(s) on the same basis. Contributions to such local and regional advertising cooperatives are credited toward the 4.5% advertising expenditures required by this Section; however, if we provide you and your local and/or regional advertising cooperative ninety (90) days' notice of a special regional promotion, you must participate in such promotion and pay to us any regional advertising fees assessed in connection therewith, beginning on the effective date of such notice and continuing until such regional promotion is concluded. Any such special regional advertising fees shall be in addition to, and not credited towards, the 4.5% advertising expenditure required by this Section.
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.
You agree not to promote, offer or sell any products or services relating to your Franchised Restaurant, or to use any of the Marks, through the Internet without our consent, which consent may be withheld for any reason or no reason. In connection with any such consent, we may establish such requirements as we deem appropriate, including (a) obtaining our prior written approval of any Internet domain name and home page addresses; (b) submission for our approval of all Web site pages, materials and content; (c) use of all hyperlinks and other links;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees are generally required to participate in marketing and advertising campaigns. Checkersrallys has the right to establish local and/or regional advertising cooperatives, and franchisees must participate in these cooperatives and their programs, although they may choose not to participate in price advertising. Franchisees must contribute to these cooperatives as determined by their by-laws.
If a Checkersrallys restaurant is in an area without an advertising cooperative, the franchisee must either spend the difference between the current National Production Fund (NPF) contribution rate and 4.5% of net sales on local marketing, contribute to an advertising purchasing collective established and controlled by Checkersrallys, or join a local or regional cooperative created by Checkersrallys in their designated marketing area. Franchisees are required to spend a minimum of 4.5% of net sales on advertising and promoting the restaurant. This spending can be through contributions to the NPF, advertising cooperatives, advertising purchasing collectives, or direct spending on approved advertising media.
Checkersrallys also has the option to implement special regional promotions, requiring franchisees to participate and pay associated regional advertising fees, given a 90-day notice. These fees are in addition to the standard 4.5% advertising expenditure requirement. All advertising and promotional materials not already approved by Checkersrallys must be submitted for prior approval, and franchisees cannot use any disapproved materials. Checkersrallys also has the ability to establish and administer a National Production Fund (NPF) for marketing materials and advertising campaigns, with franchisee contributions not exceeding 3% of net sales, payable semi-monthly along with royalty fees.