Are all Churchs Chicken franchisees required to participate in the advertising fund?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's franchise agreements for all restaurants owned by the Parent, the Company, domestic franchisees, and certain international franchisees, including all franchisees in Puerto Rico, require participation and contributions of a percentage of their gross sales to an advertising fund administered by Church's Chicken Advertising Fund (the 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.
Advertising and standardization of advertising and promotion is important to the goodwill and public image of the System. Our advertising program is conducted through a national fund ("Ad Fund") which is described below. We control the Ad Fund and administer it to support each designated market area ("DMA"). Under the Franchise Agreement, we must use the Ad Fund for advertising, marketing, and public relations programs and related activities, and (except as stated in the Franchise Agreement) we cannot use the Ad Fund for our general operating expenses.
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, participation in the advertising fund is generally required for all franchisees. The franchise agreements for all restaurants owned by the Parent, the Company, domestic franchisees, and certain international franchisees, including all franchisees in Puerto Rico, mandate contributions to the Church's Chicken Advertising Fund.
Specifically, all Churchs Chicken franchisees must contribute 5% of their restaurant's gross sales to the Ad Fund weekly. However, Churchs Chicken may require a minimum annual contribution of $25,000. The FDD notes that all franchisees contribute to the Ad Fund on the same basis, although some older franchise agreements may have different contribution rates. Additionally, certain franchisees in captive locations, such as food courts, might have negotiated lower Ad Fund contribution rates.
Restaurants owned by Churchs Chicken and its affiliates also contribute to the Ad Fund on the same basis as franchisees, or even at a greater percentage of gross sales. This advertising program is conducted through a national fund (Ad Fund) to support each designated market area (DMA). The Ad Fund is used for advertising, marketing, and public relations programs and related activities.