What section of the Checkersrallys franchise agreement discusses the National Production Fund?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
3.06 Initial Advertising and Promotional Program.If this Agreement is for a new Restaurant, you agree to contribute Fifteen Thousand Dollars ($15,000) to the National Production Fund (the "Initial Advertising Deposit"). The Initial Advertising Deposit is due upon commencing construction at the Premises for the Franchised Restaurant. We describe the National Production Fund below in Section 10.01. We agree to use the Initial Advertising Deposit to conduct, through the NPF (and, if applicable, any local advertising cooperative), an initial advertising and promotional program for the Franchised Restaurant as we deem appropriate.
The Initial Advertising Deposit will be used to purchase advertising and promotions for the Franchised Restaurant, and to cover the types of expenses incurred by the NPF relating to the Franchised Restaurant. Upon completion of the initial advertising and promotional program we shall (after deducting for incurred costs and expenses) credit any remaining amount from the Initial Advertising Deposit towards your required advertising contributions to the NPF or your local advertising cooperative. We make no representation or warranty as to the effectiveness of the initial advertising and promotional program for the Franchised Restaurant and have no obligation to account to you for the Initial Advertising Deposit (apart from our obligation to account for the NPF generally, as described in Section 10.01).
10.01 National Production Fund.We may, in our sole discretion, establish and administer a National Production Fund ("NPF") for the creation and production of marketing materials and preparation of advertising campaigns. In addition to the Initial Advertising Deposit under Section 3.06, you must contribute to the NPF amounts that we establish at any time and from time to time, not to exceed three percent (3%) of Net Sales, which are payable semi-monthly together with the royalty fees due hereunder. Upon notice from us, you may be required to contribute to the NPF for each Bi-weekly Period, concurrently with the payment of royalty fees on a biweekly basis.
The NPF may be incorporated or operated through a separate entity as we deem appropriate in our sole discretion. Any such entity will have all of the rights and duties as specified in this Section. We will direct all programs that the NPF finances, including, without limitation, the creative concepts, materials, and endorsements used and their geographic, market, and media placement and allocation. The NPF may pay for preparing and producing video, audio, and written materials and electronic media; developing, implementing, and maintaining an electronic commerce website and/or related strategies; administering regional and multi-regional marketing and advertising programs, including, without limitation, purchasing trade journal, direct mail, and other media advertising and using advertising, promotion, and marketing agencies and other advisors to provide assistance; and supporting public relations, market research, and other advertising, promotion, and marketing activities.
- 6.04 Interest On Late Payments.All amounts which you owe us or any of our Affiliates for any reason, including amounts payable into the NPF (as provided in Sections 3.05 and 10.01), shall bear interest accruing as of their original due date at the maximum interest rate permitted by law, If there is no applicable legal maximum rate, interest will be calculated at the rate of four percent (4%) above the prime rate of interest on the first day of each month for the past due amount, as published in The Wall Street Journal.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the National Production Fund (NPF) is discussed in Section 10.01 of the franchise agreement. Additionally, Section 3.06 mentions the National Production Fund in relation to the Initial Advertising Deposit.
Section 10.01 outlines that Checkersrallys may establish and administer the NPF for marketing material creation and advertising campaign preparation. Franchisees must contribute to the NPF, with amounts not exceeding three percent (3%) of Net Sales, payable semi-monthly along with royalty fees. Checkersrallys has the discretion to manage the NPF and direct its programs, including creative concepts, materials, endorsements, and their placement.
Section 3.06 specifies that new restaurant franchisees must contribute Fifteen Thousand Dollars ($15,000) as an Initial Advertising Deposit to the NPF upon commencing construction. This deposit will be used for the franchised restaurant's initial advertising and promotional program. Any remaining amount after deducting costs may be credited towards the franchisee's required advertising contributions to the NPF or local advertising cooperative. Furthermore, Section 6.04 indicates that amounts payable into the NPF, as provided in Sections 3.05 and 10.01, will bear interest if payments are late.