What is Checkers' right if the Franchise Agreement and initial fees are not received on time?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
|---|---|---| | grant the right to operate, any "Checkers" or “Rally’s”-branded restaurants located within the | | | | | | | Development Area, | except for: | (1) franchises granted | pursuant to this | Agreement; | (2) |
EXHIBIT A TO THE RESTAURANT DEVELOPMENT AGREEMENT
| 7.04 | Special Transfers. | Neither Section | 7.06 | nor Section 7.2(f) apply to any | |---|---|---|---|---| by which the Restaurant must be opened; and (ii) the amount of initial franchise fee, if those
timelines are met.
| on , under the laws of the State of . It has not conducted | | | |---|---|---| | business under any name other than its partnership name. The following is a list of all of Area | | | | Franchisee’s general partners as of | , | . | If (i) you fail t
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if a franchisee fails to meet specified timelines, maintain property control, or breaches any terms of the agreement, the initial franchise fee will automatically readjust to the standard amount of $30,000. This applies regardless of any initial franchise fee reduction listed in Section 3(b) of the agreement. This readjustment occurs without notice from Checkers.
This provision means that prospective Checkers franchisees must adhere strictly to the timelines and conditions outlined in the franchise and development agreements. Failure to do so can result in a significant increase in the initial franchise fee, potentially impacting the franchisee's financial planning and profitability. The franchisee loses any negotiated discount and must pay the full $30,000 initial fee.
It is important for potential Checkers franchisees to carefully review Sections 3(a) and 3(b) of the Franchise Agreement to fully understand the timelines and conditions that could trigger this fee readjustment. Franchisees should also ensure they have sufficient capital and resources to meet these obligations and avoid any breaches of the agreement. This automatic readjustment underscores the importance of compliance and diligent management in the Checkers franchise system.