If a Checkers franchisee requests a transfer before opening their restaurant and Checkers approves it, what payment, beyond the transfer fee, is required 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 amount of the Initial Fee Reduction prior to the transfer.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, if a franchisee requests a transfer before opening their restaurant and Checkers approves the transfer, the franchisee must pay the amount of the Initial Fee Reduction as a pre-closing condition, in addition to any transfer fee payable. Alternatively, the franchisee may have to 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This means that if Checkers offered a reduced initial franchise fee to incentivize the franchisee, that discount is rescinded if the franchisee seeks to transfer the franchise before opening. The franchisee will have to pay the difference between the reduced fee and the standard initial franchise fee.
This policy protects Checkers from franchisees who might try to flip franchises without ever developing them. It ensures that Checkers receives the full initial franchise fee for each location, even if the original franchisee doesn't ultimately operate the restaurant. Prospective franchisees should consider this potential cost when evaluating the franchise opportunity and their long-term plans.