Does the Churchs Chicken FDD table provide any specific financial information?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
are not required to consult with the Marketing EAC.
The Ad Fund:
All franchisees must contribute to our Ad Fund. You must contribute to the Ad Fund each week 5% of your Restaurant's Gross Sales. However, we may require you to contribute a minimum of $25,000 per year to the Ad Fund. If we create an Ad Co-op and require your participation, you must still contribute 5% of your Restaurant's weekly Gross Sales to the Ad Fund. All franchisees contribute to the Ad Fund on the same basis (except that some older Franchise Agreements may provide for different contribution rates and certain franchisees in captive locations (e.g., food courts) may have a negotiated lower Ad Fund contribution rate).
Restaurants that we and our affiliates own contribute to the Ad Fund on the same basis as you, except where our restaurants contribute a greater percentage of Gross Sales than you.
We administer the Ad Fund and have the right to direct all spending by the Ad Fund.
We do not audit the Ad Fund on an annual basis. We do prepare an annual statement of monies collected and costs incurred by the Ad Fund and can provide it to you on written request.
In fiscal year 2024, 16% of the Ad Fund was spent on production; 56% was spent on media placement; 6% was spent on point-of-purchase items; 2% was spent on research and development; 1% was spent on public relations and promotions; 4% was spent on digital technology; and 15% was spent on administration and one time strategic initiatives/research (e.g., core consumer research).
The Ad Fund currently uses all contributions made to it, and any earnings on those contributions exclusively to pay the costs of maintaining, administering, directing and preparing market research, advertising and/or promotional activities. We maintain all sums paid to the Ad Fund in an account separate from our other funds. We maintain separate bookkeeping accounts for the Ad Fund.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 35–43)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, while there isn't a specific table dedicated to comprehensive financial performance representations in Item 19, there are mentions of financial obligations and fund allocations that offer some insight. Specifically, franchisees are required to contribute to the Ad Fund, with the standard contribution being 5% of the Restaurant's Gross Sales. However, Churchs Chicken may require a minimum contribution of $25,000 per year to the Ad Fund.
Additionally, the FDD provides a breakdown of how the Ad Fund was spent in fiscal year 2024. 16% of the Ad Fund was allocated to production, 56% to media placement, 6% to point-of-purchase items, 2% to research and development, 1% to public relations and promotions, 4% to digital technology, and 15% to administration and one-time strategic initiatives/research. This information is useful for a prospective franchisee to understand where their advertising contributions are directed and the relative emphasis on different marketing activities.
Furthermore, franchisees must report sales and other information weekly through the Church's Sales Information (CSI) web portal, which includes sales, transactions, and pertinent business information. While this doesn't provide explicit financial performance data, it highlights the ongoing reporting requirements and the type of data Churchs Chicken collects from its franchisees. A prospective franchisee should inquire about Item 19, which would contain financial performance representations, to gain a clearer understanding of potential revenues, expenses, and profitability.