If a Checkers franchisee requests a transfer before opening their restaurant and it's approved, what must they pay in addition to the transfer fee as a pre-closing condition?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
4. Additional Condition(s).
- a. If, before you open the Franchised Restaurant, you request and we approve a transfer in accordance with Section 13, then as a pre-closing condition of the transfer (in addition to any transfer fee payable) you must pay us the full standard amount of the initial franchise fee (as measured on the Effective Date of your Franchise Agreement) that was reduced or waived pursuant to this Addendum.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if a franchisee requests a transfer before opening their restaurant and Checkers approves it, the franchisee must pay an additional fee as a pre-closing condition. Specifically, the franchisee must pay the full standard amount of the initial franchise fee (as measured on the Effective Date of your Franchise Agreement) that was reduced or waived pursuant to the addendum. This is in addition to any transfer fee that is payable.
In simpler terms, if Checkers offered a discount or waived a portion of the initial franchise fee when the franchisee first signed the agreement, the franchisee must repay that waived or reduced amount before the transfer can be finalized. This ensures that Checkers receives the full initial franchise fee as originally intended, even if the franchisee exits the agreement early through a transfer.
This condition protects Checkers' financial interests by ensuring they receive the full initial franchise fee, even if a franchisee decides to transfer the franchise before opening the restaurant. For a prospective franchisee, this highlights the importance of carefully considering the implications of transferring the franchise before it becomes operational, as it could involve a significant additional payment.