What is the Advertising Fund Contribution fee for a Churchs Chicken franchise?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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| TYPE OF FEE1 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Tax Reimbursement | If any taxes, fees or assessments are imposed on us by reason of our acting as franchisor or licensing proprietary marks to you, then you must reimburse us that amount | 30 days after receipt of invoice | |
| Advertising Fund Contribution | 5% of Gross Sales (up to 1% of Gross Sales if a Regional Co-Op has been formed, plus contribution to Co-Op) and at least $25,000/year | Same as Royalty | |
| Digital and Technology Fees | Then-current amount. Beginning on July 15, 2024, about $205 per period ($2,665 annually) plus 5% of first party digital sales. | Same as Royalty | These amounts may change. This fee covers the costs for your participation in our integrated platforms for enhancing customer experiences with ordering, product pick up, and engagement. The fixed annual fee may be discounted for restaurants that were open all of 2024 and had annual sales less than a determined threshold amount. |
| Transfer | $10,000 | On transfer of franchise | |
| Unauthorized Transfer | $25,000 | On transfer of franchise if transfer made in violation of Franchise Agreement | |
| Renewal | 50% of our then-current, standard, initial franchise fee | On signing of Franchise Agreement for the renewal term | Renewal is subject to contractual requirements. See Item 17. |
| Securities Offering Review Fee | $10,000 or any greater amount as necessary to reimburse us for reviewing the proposed offering | On request for review | Fee charged only if you propose to place securities in public or private offering. |
| New Supplier Inspection and Product Testing | Cost of inspecting the facilities of a previously unapproved supplier you propose and of testing ingredients, products, supplies or goods you propose to purchase from that supplier (could range from $0 to $5,000) | If incurred, on demand | You must pay the costs of our inspection of the facilities of a previously unapproved supplier you propose and of our testing ingredients, |
Source: Item 6 — OTHER FEES (FDD pages 19–24)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the Advertising Fund Contribution fee is 5% of Gross Sales, but can be reduced to up to 1% of Gross Sales if a Regional Co-Op has been formed. In addition to the percentage of gross sales, franchisees must contribute at least $25,000 per year to the advertising fund. This contribution is due at the same time as royalty payments.
The purpose of this advertising fee is to support marketing and promotional activities for the Churchs Chicken brand. These activities are intended to drive sales and increase brand awareness, which benefits all franchisees within the system. The funds collected are used for various advertising initiatives, such as national and regional campaigns, digital marketing, and local store marketing support.
The structure of the advertising contribution, with both a percentage of gross sales and a minimum annual payment, ensures that the advertising fund receives consistent support, regardless of an individual restaurant's sales performance. The potential reduction to 1% of Gross Sales if a Regional Co-Op has been formed provides an incentive for franchisees to collaborate on regional marketing efforts, allowing for more targeted and effective advertising campaigns. Franchisees should inquire about the formation and operation of Regional Co-Ops in their area to understand if they can take advantage of this reduced rate.
It is important for prospective franchisees to factor this ongoing advertising contribution into their financial projections. Understanding how the advertising funds are managed and allocated can help franchisees assess the value they receive from these contributions. Additionally, franchisees should be aware of the due dates for these payments to ensure compliance with the franchise agreement.