Are Churchs Chicken franchisees required to participate in the advertising fund?
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 o
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, all franchisees must contribute to the Ad Fund. Franchisees are required to contribute 5% of their restaurant's gross sales each week to the Ad Fund. However, Churchs Chicken may require a minimum contribution of $25,000 per year.
Even if Churchs Chicken creates an Ad Co-op requiring franchisee participation, franchisees must still contribute 5% of their restaurant's weekly gross sales to the Ad Fund. The FDD states that all franchisees contribute to the Ad Fund on the same basis, although some older franchise agreements may have different contribution rates. Certain franchisees in captive locations, such as food courts, may have a negotiated lower Ad Fund contribution rate.
Restaurants owned by Churchs Chicken and its affiliates also contribute to the Ad Fund on the same basis as franchisees. However, Churchs Chicken's restaurants may contribute a greater percentage of gross sales than franchisees. Churchs Chicken administers the Ad Fund and has the right to direct all spending by the Ad Fund. In fiscal year 2024, the Ad Fund was spent on production (16%), media placement (56%), point-of-purchase items (6%), research and development (2%), public relations and promotions (1%), digital technology (4%), and administration and strategic initiatives (15%).