Are all Churchs Chicken franchisees required to participate in and contribute to 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).
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 mandatory for almost 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, require participation and contributions to the Churchs Chicken Advertising Fund. This means that as a franchisee, you will be obligated to contribute a percentage of your gross sales to this fund.
The standard contribution is 5% of the Restaurant's Gross Sales each week. However, Churchs Chicken may require a minimum contribution of $25,000 per year. Even if an Ad Co-op is created and participation is required, the 5% contribution of weekly Gross Sales to the Ad Fund remains in effect.
While participation is generally mandatory, there are a couple of exceptions. Some older Franchise Agreements may stipulate different contribution rates. Additionally, certain franchisees in captive locations, such as food courts, might have a negotiated, lower Ad Fund contribution rate. However, the general rule is that all Churchs Chicken franchisees must participate in and contribute to the advertising fund, ensuring a consistent flow of resources for marketing and promotional activities.