What factors determine the number of Checkers restaurants required to be developed under a Development Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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Development Agreement
If we agree to grant you development rights, you and we will enter into a Development Agreement, which requires you to pay a development fee of $10,000 per restaurant to be developed. The number of restaurants to be developed pursuant to a Development Agreement varies depending upon a variety of factors, including (1) existing population and anticipated population growth within the Development Area; (2) competition within the Development Area; and (3) the number of Checkers Restaurants or Rally's Restaurants we estimate can be developed within the Development Area.
Under the Development Agreement, you are required to pay the then-current standard initial franchise fee for each Restaurant you are required to develop under a Development Agreement; however, $10,000 of the development fee is credited to the initial franchise fee payable for each Restaurant you are required to open under the Development Agreement until the development fee is credited in full. The development fee is not refundable, in whole or in part, except if we terminate the Development Agreement as a result of adverse franchise legislation. In this event, we will r
Source: Item 5 — INITIAL FEES (FDD pages 17–21)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the number of restaurants a franchisee is required to develop under a Development Agreement is determined by several factors. These include the existing population and anticipated population growth within the designated Development Area. Checkers also considers the level of competition present within that area. Finally, the company assesses the estimated number of Checkers or Rally's restaurants that the Development Area can support.
If Checkers grants a franchisee development rights, both parties will enter into a Development Agreement. This agreement mandates a development fee of $10,000 per restaurant to be developed. While the number of restaurants can vary based on the factors mentioned above, this fee provides Checkers with compensation for granting the franchisee exclusive development rights within a specific geographic area.
Under the Development Agreement, the franchisee must pay the standard initial franchise fee for each restaurant they are required to develop. However, $10,000 of the development fee is credited towards the initial franchise fee for each restaurant opened under the agreement until the development fee is fully credited. This credit effectively reduces the initial financial burden on the franchisee as they open new locations. The development fee is generally non-refundable, but Checkers will refund any uncredited portion if the Development Agreement is terminated due to adverse franchise legislation.