What is the effect of the Existing Franchisee Incentive on the Initial Franchise Fee for Checkers franchisees who qualify?
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;
- 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.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, Checkers offers an incentive program for existing franchisees of Checkers or Rally's restaurants. Under this program, qualified franchisees may receive a reduction of $10,000 on the initial franchise fee. This incentive, known as the "Existing Franchisee Incentive," is applicable if the franchisee opens their new Checkers restaurant within one year of signing the Franchise Agreement.
To qualify for the Existing Franchisee Incentive, franchisees must meet specific criteria. They must be existing franchisees in good standing with Checkers or its affiliates, operating at least two Checkers or Rally's restaurants under separate franchise agreements. Additionally, franchisees must remain in good standing and comply with all effective agreements with Checkers, including the Franchise Agreement. A key requirement is that the franchisee must open the new franchised restaurant within one year of signing the Franchise Agreement to be eligible for the reduced initial franchise fee.
The addendum to the Franchise Agreement specifies that Section 6.01, which likely details the standard initial franchise fee, is revised to reflect the $10,000 reduction. This reduction is termed the "Initial Fee Reduction." However, if the franchisee requests a transfer before opening the restaurant or breaches any of the qualification criteria, they may be required to pay back the reduced amount. This ensures that the incentive is tied to the franchisee's active operation and compliance with the agreement.
This incentive program can significantly lower the initial investment for existing Checkers or Rally's franchisees looking to expand their operations. However, franchisees must carefully adhere to the conditions, particularly the one-year opening deadline and maintaining good standing, to avoid losing the benefit of the $10,000 reduction. Prospective franchisees should carefully review the full terms and conditions of the incentive program as outlined in the Franchise Agreement and related addenda.