What is the royalty fee structure for Checkers franchises as detailed in Item 6?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
If the Franchised Restaurant is to be located at a Non-Traditional Site, you must enter into our Non-Traditional Site Addendum attached as Exhibit B-3. The Non-Traditional Site Addendum requires you to pay a reduced initial franchise fee of $15,000 and a reduced royalty fee level of 2% of Net Sales at the Franchised Restaurant (as reduced from the standard royalty fee of 4% for new Franchised Restaurants); and, to the extent we or our affiliates can reasonably arrange with the membership of your regional or local cooperative, a reduced cooperative advertising contribution level equal to 50% of the contribution level payable by fellow members of your regional or local cooperative (whose restaurants are not located at a Walmart or other Non-Traditional Site), if any such cooperative already exists or is formed in your Franchised Restaurant's area.
If you: (i) sign a Franchise Agreement (and pay the standard initial franchise fee) on or before December 30, 2025; (ii) open the Franchised Restaurant to the general public within 18 months of signing the Franchise Agreement; (iii) the Franchised Restaurant complies with the current reimaging requirements; and (iv) you, your owners, or your and their affiliates are Restaurant Net Positive (defined above) at the time the Franchised Restaurant opens, then we will waive the royalty fee payable under the Franchise Agreement until the earlier of: (a) the total value of the royalty fee abatement (calculated based on the standard royalty fee due under the Franchise Agreement) equals $75,000 or (b) the Franchised Restaurant has operated for twenty-four (24) months.
NOTE 2: The term "Net Sales" means all revenue derived from operating the Franchised Restaurant, including the aggregate of all sales amounts from food, beverages and other products sold and services rendered at the Premises or otherwise rendered in connection with your Franchised Restaurant, and all monies derived from sales at or away from the Franchised Restaurant, whether from cash, check, credit or debit card, barter exchange, trade credit, or other credit transactions, but: (1) excluding all federal, state or municipal sales, use or service taxes collected from customers and paid to the appropriate taxing authority; and (2) reduced by the amount of any documented refunds, credits, allowances, adjustments, promotional discounts, and charge-backs the Franchised Restaurant provides to customers in good faith.
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, the standard royalty fee is 4% of Net Sales for new Franchised Restaurants. Net Sales includes all revenue from food, beverages, products, and services, whether from cash, credit, or other transactions, excluding sales taxes and reduced by documented refunds or discounts.
For Non-Traditional Sites, such as those located at Walmart, Checkers offers a reduced royalty fee of 2% of Net Sales. This reduced fee is outlined in the Non-Traditional Site Addendum, which also includes a reduced initial franchise fee of $15,000.
Checkers also offers a growth incentive program. If a franchisee signs a Franchise Agreement by December 30, 2025, opens the restaurant within 18 months, complies with reimaging requirements, and is Restaurant Net Positive, the royalty fee may be waived. This waiver continues until the total value of the waived royalties reaches $75,000 or the restaurant operates for 24 months. This incentive is designed to encourage growth and support new franchisees in their initial period of operation.