Does Checkersrallys have the right to establish local or regional advertising cooperatives?

According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys retains the right to establish local and regional advertising cooperatives for Checkers Restaurants and/or Rally's Restaurants. These cooperatives cover geographical areas designated by Checkersrallys. The marketing department determines these areas, and Checkersrallys implements a co-op if it believes a percentage of Net Sales from all restaurants in the area can buy sufficient advertising in various media. Checkersrallys has the sole discretion to form, change, dissolve, or merge these advertising cooperatives.

As a Checkersrallys franchisee, you are generally required to participate in these advertising cooperatives, adhering to their bylaws and contributing amounts determined by the cooperative. However, you can opt out of price advertising. The contribution rates to these cooperatives are determined by the cooperative itself. Checkersrallys may attempt to work with the cooperative to revise bylaws for varied participation or contribution levels among members, especially for restaurants at Non-Traditional Sites that may benefit less from local advertising.

Contributions to these local and regional advertising cooperatives count toward the 4.5% of Net Sales that franchisees are required to spend on advertising. However, Checkersrallys can require participation in special promotions with 90 days' notice, where advertising fees would be in addition to the standard 4.5% requirement. The bylaws of the co-op are available for franchisee review, and financial statements and reports are also accessible. Decisions are generally made by a majority vote, with one vote per restaurant; Checkersrallys may control the cooperative in areas where company-owned restaurants form the majority. Cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales, but are subject to change.