Is the development fee paid to Checkers refundable?
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 period you have the substitute Restaurant open and operating in compliance with the Franchise Agreement therefor.
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- The development fee shall be Dollars ($ ), representing Ten Thousand Dollars ($10,000) for each Restaurant to be developed pursuant to Section 3(a), above, for which an initial franchise fee is due.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the development fee is generally non-refundable. The FDD states that the development fee is non-refundable under any circumstances, including if the franchisee fails to develop the restaurants as planned. This fee is considered earned by Checkers once it is paid.
The development fee is calculated at $10,000 for each restaurant to be developed under the agreement. This fee is applied towards the initial franchise fee due for each franchise agreement the franchisee enters into, following the development schedule.
However, there is one exception: Checkers will refund the unapplied portion of the development fee if the agreement is terminated due to new federal or state legislation, regulation, or rule that adversely affects Checkers' rights, remedies, or discretion in franchising restaurants. This is a specific and limited circumstance. Prospective franchisees should be aware that outside of this specific scenario, the development fee is non-refundable, representing a financial risk if development plans change or are not fulfilled.