What is the effect of the Existing Franchisee Incentive Addendum on the Initial Franchise Fee if the Checkers franchisee does not open the restaurant within one year?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
4. Additional Condition(s).
- 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' 2025 Franchise Disclosure Document, the Existing Franchisee Incentive Addendum provides a reduction in the initial franchise fee of $10,000 if the franchisee opens their restaurant within one year of signing the Franchise Agreement. However, if the Checkers franchisee fails to open the restaurant within this one-year timeframe, they will be required to pay back the amount of the initial fee reduction.
Specifically, if a Checkers franchisee does not meet the condition of opening the franchised restaurant within one year of signing the Franchise Agreement, they must pay Checkers the amount of the Initial Fee Reduction. This payment is due no later than thirty days after receiving written notice from Checkers. This clause ensures that franchisees are incentivized to open their restaurants promptly and adhere to the agreed-upon timeline.
This condition is in addition to any other remedies that Checkers may pursue under the Franchise Agreement or applicable law, meaning that failing to open on time could lead to further penalties beyond simply repaying the initial fee reduction. For a prospective Checkers franchisee, this highlights the importance of careful planning and execution to ensure the restaurant opens within the stipulated timeframe to avoid losing the incentive and potentially facing additional repercussions.