Under what circumstances may a Checkersrallys franchisee's advertising expenditures exceed 4.5% of Net Sales?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 3: We require you to spend 4.5% of your Net Sales on advertising and marketing your Franchised Restaurant, which includes your NPF contribution, your contribution to a regional or local advertising cooperative, and amounts you spend marketing your Franchised Restaurant in your local market or that we require you to contribute to an advertising purchasing collective that we establish and control. Your advertising expenditures may exceed 4.5% of your Net Sales if you are a member of a regional or local advertising cooperative whose required contribution rate, when added to your NPF contribution rate, exceeds 4.5%. Your advertising expenditures also may exceed 4.5% of your Gross Sales if in addition to your NPF contribution rate and your regional or local advertising cooperative contribution, you elect to spend an additional amount marketing your Franchised Restaurant in your local market.
Source: Item 6 — OTHER FEES (FDD pages 21–29)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees are generally required to spend 4.5% of Net Sales on advertising and marketing. This includes contributions to the National Production Fund (NPF), regional or local advertising cooperatives, and local market spending or contributions to an advertising purchasing collective. However, a franchisee's advertising expenditures may exceed this 4.5% threshold under specific circumstances.
First, if a Checkersrallys franchisee is a member of a regional or local advertising cooperative, and the required contribution rate for that cooperative, when combined with the NPF contribution rate, exceeds 4.5% of Net Sales, then the franchisee's total advertising expenditure will exceed the minimum requirement. Second, a franchisee may choose to spend more than the required 4.5% by independently allocating additional funds to marketing their specific restaurant in their local market, on top of their NPF and cooperative contributions.
In summary, while Checkersrallys mandates a minimum advertising expenditure of 4.5% of Net Sales, franchisees should be aware that their actual spending could be higher if their local advertising cooperative requires a higher contribution or if they proactively invest additional funds in local marketing efforts. Franchisees should carefully evaluate the advertising requirements and potential costs associated with local cooperatives when assessing the overall financial obligations of the franchise.