What is the effect of the Checkers Existing Franchisee Incentive Addendum on the operation of another Checkers restaurant?
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 F
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, the Existing Franchisee Incentive Addendum modifies the franchise agreement to provide benefits to existing franchisees who are opening an additional Checkers restaurant. Specifically, the addendum reduces the initial franchise fee by $10,000 if the franchisee opens the new restaurant within one year of signing the franchise agreement. This incentive is designed to encourage existing franchisees to expand their operations.
To qualify for the Existing Franchisee Incentive, a franchisee must already operate at least two Checkers or Rally's restaurants under separate franchise agreements and must be in good standing with Checkers. The franchisee must also develop the new restaurant according to Checkers' current prescribed plans, specifications, and design model. The addendum itself becomes part of the franchise agreement, and in case of conflicts, the terms of the addendum take precedence.
This incentive does not grant the franchisee any exclusive territory or protected rights for the new restaurant's location. Checkers retains the right to operate or franchise other Checkers or Rally's restaurants in any location, regardless of the proximity to the franchisee's new restaurant. This means that while the franchisee benefits from a reduced initial fee, they still face the risk of competition from other Checkers locations.
Overall, the Existing Franchisee Incentive Addendum is a tool used by Checkers to encourage growth among its existing franchisees by lowering the initial investment for new locations. However, franchisees should be aware that this incentive does not provide any territorial protection and that Checkers can still franchise or operate other locations nearby.