What is the transfer fee required by Checkers for the transfer of Development Rights?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
If we have not exercised our right of first refusal under Section 7.06, we will not unreasonably withhold our approval of a Transfer of the Development Rights that meets all of the reasonable restrictions, requirements and conditions we impose on the transfer, the transferor(s) and/or the transferee(s), including the following:
- (g) You or the transferee must pay us a transfer fee equal to $20,000;
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, a franchisee who is transferring their Development Rights must pay a transfer fee of $20,000 to Checkers. This fee is one of the conditions that must be met for Checkers's approval of the transfer.
In addition to the transfer fee, Checkers outlines several other conditions that both the franchisee (transferor) and the proposed new franchisee (transferee) must meet. The franchisee must be in compliance with their existing agreements and have an operating restaurant. The proposed transferee must demonstrate good character, sufficient business experience, and adequate financial resources. They must also agree to be bound by the existing Development Agreement terms for the remainder of its term and acquire all of the franchisee's rights under any franchise agreements.
Checkers also retains the right of first refusal, allowing them to purchase the Development Rights themselves under the same terms offered by a third party. If Checkers chooses not to exercise this option, the franchisee can proceed with the transfer to the proposed transferee, provided all conditions are met and the terms of the offer remain materially unchanged. This ensures Checkers maintains control over who joins their franchise system and protects their interests during ownership changes.
These transfer conditions and the associated fee are typical in franchising. They allow Checkers to vet potential new franchisees, ensure compliance with existing agreements, and receive compensation for facilitating the transfer. Prospective franchisees should carefully consider these costs and conditions when evaluating the potential resale value of their Development Rights.