What must occur before Checkers requires payment of initial fees under the Development Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Despite the payment provisions in Item 5 of the Disclosure Document, we will defer your payment of initial fees owed by you to us under the Franchise Agreement until all of our pre-opening obligations have been satisfied and you commence doing business under the Franchise Agreement.
We also will defer collection of all initial fees owed under the Development Agreement until we have completed all of our pre-opening obligations under the applicable franchise agreement entered into pursuant to the Development Agreement and you commence doing business under that franchise agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Checkers will defer collecting initial fees owed under the Development Agreement until they have completed all pre-opening obligations under the applicable franchise agreement. This agreement is entered into as part of the Development Agreement. Additionally, the franchisee must commence business operations under that franchise agreement.
This means a prospective Checkers developer won't have to pay the initial franchise fees until Checkers has fulfilled its pre-opening responsibilities, such as site selection assistance, training, and providing operations manuals. This deferral is tied to the first franchise agreement established under the Development Agreement.
This arrangement could benefit franchisees by reducing their upfront financial burden and aligning Checkers' interests with the franchisee's success in opening and operating the first restaurant. However, the development fee itself is non-refundable and is deemed earned when paid, regardless of whether the franchisee successfully develops all planned restaurants.