If a Checkers Franchise Agreement is signed in connection with a Development Agreement, how does the development fee affect the initial franchise fee?
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 refund the uncredited portion of the development fee.
During our 2024 fiscal year, we did not collect a reduced development fee from
Source: Item 5 — INITIAL FEES (FDD pages 17–21)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, when a Franchise Agreement is signed in conjunction with a Development Agreement, a portion of the development fee is credited towards the initial franchise fee. Checkers requires a development fee of $10,000 per restaurant to be developed under a Development Agreement. The number of restaurants to be developed depends on factors such as population, population growth, and competition within the designated Development Area.
Specifically, $10,000 of the development fee is credited to the initial franchise fee for each restaurant the franchisee is required to open under the Development Agreement. This credit continues until the entire development fee has been applied. The standard initial franchise fee is $30,000. Therefore, the development fee effectively reduces the initial franchise fee by $10,000 per restaurant, up to the total amount of the development fee paid.
It’s important to note that the development fee is generally non-refundable. However, if Checkers terminates the Development Agreement due to adverse franchise legislation, any uncredited portion of the development fee will be refunded to the franchisee. During the 2024 fiscal year, Checkers did not collect a reduced development fee from any franchisee that signed a Development Agreement.