What is the condition for a Checkers franchisee to receive the $10,000 reduction in the Initial Franchise Fee?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, Franchisor has implemented an incentive program available to qualified existing franchisees of "Checkers" or "Rally's" restaurants under which the Initial Franchise Fee due under Franchisor's current form of franchise agreement is reduced by $10,000 if the franchisee opens its Restaurant within one (1) year of signing the Franchise Agreement (the "Existing Franchisee Incentive" or "Incentive");
WHEREAS, Franchisee is an existing franchisee under separate franchise agreements with Franchisor for the operation of at least two (2) "Checkers" or "Rally's" restaurants;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
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- Qualifications. You represent, and in connection with signing this Addendum have provided us (or agree to provide promptly upon our request) relevant supporting documentation, that: (a) you are a current franchisee in good standing
with us, including being in full compliance with all currently effective agreements with us or our affiliates; and (b) you will remain a franchisee in good standing, and comply with all currently effective agreements with us or our affiliates including the Franchise Agreement; and (c) you agree to open the Franchised Restaurant within one (1) year of signing the Franchise Agreement.
- Reduced Fee(s). In consideration of your qualification for the Incentive identified in the Recitals above, Section 6.01 is revised to reflect that the Initial Franchise Fee due is reduced by ten thousand dollars ($10,000) (the "Initial Fee Reduction") from the standard amount of the current initial franchise fee otherwise due for a new Restaurant.
4. Additional Condition(s).
- a. If, before you open the Franchised Restaurant, you request and we approve a transfer in accordance with Section 13 of the Franchise Agreement, then as a pre-closing condition of the transfer (in addition to any transfer fee payable) you must pay us the amount of the Initial Fee Reduction prior to the transfer.
- b. If, at any time during the Term, you breach, fail to satisfy, or are later found to have violated or failed to satisfy, any of the criteria listed in Section 2 above, including without limitation your obligation to open the Franchised Restaurant within one (1) year of signing the Franchise Agreement, then in addition to any other remedies available under the Franchise Agreement or at applicable law, you must pay us (no later than thirty (30) days after our written notice to you) the amount of the Initial Fee Reduction.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, an existing franchisee can receive a $10,000 reduction in the initial franchise fee if they open their restaurant within one year of signing the Franchise Agreement. This incentive is part of an existing program implemented by Checkers to motivate qualified franchisees to expand their operations. To qualify, the franchisee must already operate at least two Checkers or Rally's restaurants under separate franchise agreements with the company.
To qualify for the incentive, the franchisee must be in good standing with Checkers, fully compliant with all existing agreements with Checkers or its affiliates, and agree to open the franchised restaurant within one year of signing the franchise agreement. This indicates that Checkers is focused on partnering with franchisees who are committed to rapid and compliant expansion.
However, the addendum also outlines conditions under which the franchisee would be required to repay the $10,000 reduction. If the franchisee requests a transfer before opening the restaurant, they must pay the amount of the Initial Fee Reduction prior to the transfer. Additionally, if the franchisee breaches any of the qualification criteria, including the obligation to open the restaurant within one year, they must repay the $10,000 within thirty days of written notice from Checkers. This clawback provision protects Checkers's interests and ensures that the incentive is only granted to franchisees who fulfill their commitments.
It is important to note that this incentive is specifically for existing franchisees. New franchisees who are not already operating Checkers or Rally's restaurants would not be eligible for this particular reduction in the initial franchise fee. Prospective franchisees should carefully review the franchise agreement and any related addenda to fully understand the terms and conditions of any incentives offered by Checkers.