What is the amount of the development fee for a Checkers franchise, and how is it calculated?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
pply to any Franchise Agreement entered into in connection with a renewal or transfer of a Restaurant.
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- For purposes of the chart in Section 3(a), above, a Restaurant that is permanently closed after having been opened, other than as a result of noncompliance by you with the terms of the applicable Franchise Agreement, shall be deemed open for a period of 6 months after the last day it was open for business, provided that: (i) during such period of time, you continuously and diligently take such actions as may be required to develop and open a substitute Restaurant within the Development Area pursuant to a new Franchise Agreement therefor; and (ii) by the end of such peri
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the development fee is calculated based on the number of restaurants a franchisee commits to developing under the Development Agreement. The fee is Dollars ($), representing $10,000 for each restaurant to be developed. Thus, if a franchisee agrees to develop five restaurants, the development fee would be $50,000.
The development fee is non-refundable under any circumstances, including if the franchisee fails to develop any of the restaurants as planned. This fee is considered earned by Checkers upon payment. However, for each Franchise Agreement that the franchisee enters into according to the development schedule, Checkers will apply $10,000 of the development fee towards the initial franchise fee due under that Franchise Agreement. This means the development fee essentially acts as a credit towards the initial franchise fees for each location as it opens.
Prospective Checkers franchisees should carefully consider the development schedule and their ability to meet the obligations, as the development fee is non-refundable even if they fail to open the agreed-upon number of restaurants. Understanding the specific terms outlined in Section 3(a) of the Franchise Agreement, which details the development schedule, is crucial. This fee structure is relatively common in multi-unit franchise agreements, designed to incentivize and secure the franchisee's commitment to area development.