How does Checkers apply the development fee towards the initial franchise fee for each Franchise Agreement?
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, if a franchisee signs a Development Agreement, they must pay a development fee representing $10,000 for each restaurant to be developed. This fee is non-refundable and considered earned upon payment.
For each individual Franchise Agreement the franchisee enters into according to the development schedule, Checkers will apply $10,000 of the development fee towards the initial franchise fee due for that specific agreement. This continues until the entire development fee has been used up.
This arrangement benefits franchisees by allowing them to spread the cost of entry over time, as the development fee contributes directly to the initial franchise fees for each location they open. However, it's important to note that the development fee is non-refundable, meaning that if the franchisee fails to open all the restaurants outlined in the development agreement, they will not receive a refund for the remaining balance of the fee.