What is the definition of 'Incentive' in the Checkers addendum?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
--|----|-----|---------|----------|-------------------------------------------------------------------------------------| | | | | | | | | | | RESTAURANTS, INC., a Delaware corporation ("Franchisor," "we," "our," or "us"), and | | | | | | | | | | | ("you" or "your" or "Franchisee"). We and you may each | | | | | be referred to as a "Party," or collectively, the "Parties." | | | | | | |
R E C I T A L S
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");
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the term "Incentive" is defined within the context of several addenda to the franchise agreement, each tailored to specific situations. For existing franchisees, the 'Existing Franchisee Incentive' reduces the initial franchise fee by $10,000 if the new Checkers restaurant opens within one year of signing the Franchise Agreement. Another incentive, the '2024 Growth Incentive', offers qualified franchisees a temporary reduction on royalty fees and a reduction of initial franchise fees for acquiring and opening new Checkers or Rally's restaurants, or converting an existing restaurant, provided the Franchise Agreement is signed on or before December 31, 2025.
These incentives are designed to encourage growth and expansion within the Checkers franchise system. The specific qualifications and conditions for each incentive are detailed in their respective addenda. For example, the Existing Franchisee Incentive requires the franchisee to already operate at least two Checkers or Rally's restaurants. The 2024 Growth Incentive is available to certain qualified franchisees who meet specific criteria set by Checkers.
Prospective franchisees should carefully review each addendum to determine which incentives they may be eligible for and understand the specific requirements. These incentives can significantly reduce the initial investment and ongoing costs associated with opening a new Checkers restaurant. However, it's crucial to meet all qualifications and conditions to receive the benefits. Franchisees should also note the expiration date of the 2024 Growth Incentive, as it requires signing the Franchise Agreement before the end of 2025.
In summary, the term "Incentive" in the Checkers FDD refers to various programs designed to financially assist franchisees under specific conditions, such as existing franchisee expansion or new restaurant development within a specified timeframe. These incentives aim to promote growth and investment within the Checkers franchise system, offering potential cost savings for those who qualify.