What must a Checkers franchisee ensure before a proposed transferee begins business activities?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ture, equipment, signs and supplies in accordance with our then current requirements and specifications for Restaurants within the time period we specify following the effective date of the transfer (we will advise the transferee before the effective date of the transfer of the specific actions that it must take and the time period within which such actions must be taken);
- (i) you must ensure that we receive, before we will approve any proposed transferee to begin conducting business activities at the Franchised Restaurant as its authorized operator, a transfer fee equal to Twenty Thousand Dollars ($20,000) (or, if the proposed transferee is a then-current franchisee of a Restaurant, a transfer fee equal to Ten Thousand Dollars ($10,000)), provided, however, if this Agreement is being transferred as part of a transaction involving franchise agreements for multiple Restaurants and the franchise agreement for each Restaurant will be transferred on the same day, notwithstanding anything to the contrary in any other franch
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a franchisee must ensure that Checkers receives a transfer fee before any proposed transferee begins conducting business activities at the franchised restaurant as its authorized operator. The transfer fee is $20,000. However, if the proposed transferee is a then-current Checkers franchisee, the transfer fee is $10,000.
If the agreement is transferred as part of a transaction involving franchise agreements for multiple restaurants and the franchise agreement for each restaurant will be transferred on the same day, the transfer fee will be $20,000 or $10,000 for the first restaurant, depending on whether the transfer is to a new franchisee or a then-current franchisee, plus $5,000 for each additional restaurant to be transferred.
This condition ensures that Checkers receives compensation when a franchise changes hands, which is a common practice in franchising. The varying fee structure incentivizes transfers to existing franchisees and acknowledges the reduced administrative burden when dealing with current franchisees. The additional fee for multiple restaurant transfers reflects the increased value and complexity of such transactions.