Does Checkers have an obligation to refund any portion of the development fee upon termination?

According to Checkers' 2025 Franchise Disclosure Document, Checkers generally does not have an obligation to refund any portion of the development fee if the agreement is terminated. However, there is one specific exception: Checkers will refund the unapplied portion of the development fee if the termination occurs under Section 8.02(g) of the agreement. Section 8.02(g) refers to a termination that occurs if any applicable federal or state legislation, regulation, or rule, enacted, promulgated, or amended after the effective date, may have an adverse effect on Checkers' rights, remedies, or discretion in franchising restaurants.

This means that if the Development Agreement is terminated due to circumstances other than those described in Section 8.02(g), such as the franchisee's breach of contract, failure to meet development schedules, or unauthorized use of confidential information, the franchisee will likely not receive a refund of the development fee. The development fee is generally deemed earned when paid, reinforcing the non-refundable nature of the fee.

For a prospective Checkers franchisee, this policy highlights the importance of understanding the conditions under which a refund might be possible. It also underscores the need to carefully evaluate the risks associated with development agreements, including potential changes in legislation that could trigger termination and impact the refund of fees. Franchisees should seek clarification from Checkers regarding specific scenarios and ensure they fully understand their obligations and potential liabilities under the Development Agreement.