Under what circumstances is an initial franchise fee not required for a Checkers franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ur expenses, including the administrative and collection efforts with respect to the fee, and are not interest charges, time-price differentials or penalties for an overdue payment. Notwithstanding the foregoing, your failure to pay the initial franchise fee when due constitutes grounds for termination of this Agreement, as provided in Section 14.
If this Agreement is executed pursuant to a separate agreement between us and you or your Affiliate for multi-unit development of Restaurants (a "Development Agreement"), the initial franchise fee is subject to any applicable credit of a portion of the development fee against the initial franchise fee in accordance with the provisions of the relevant Development Agreement. If this Agreement is executed in connection with your purchase of an existing Restaurant from us or our Affiliate, then you must also pay us an asset transfer fee of Ten Thousand Dollars ($10,000) in addition to the initial franchise fee, payable on or before closing of your purchase of the Franchised Restaurant's assets. Notwithstanding the foregoing, if this Agreement is executed in connection with your indep
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, there are specific scenarios where an initial franchise fee may not be required. If a franchisee is independently purchasing (or otherwise receiving transferred ownership interests in) the Franchised Restaurant's assets from a third-party owner, they will not pay Checkers an initial franchise fee. However, Checkers must have received the full amount of any associated transfer fee that was due to them in connection with that transaction on or before the Effective Date.
Additionally, the FDD mentions a potential credit towards the initial franchise fee if the agreement is executed under a separate agreement for multi-unit development. In this case, the initial franchise fee is subject to any applicable credit of a portion of the development fee against the initial franchise fee in accordance with the provisions of the relevant Development Agreement.
It is important to note that the initial franchise fee is generally $30,000, and it is fully earned by Checkers as of the Effective Date and is non-refundable, except under specific circumstances related to site selection issues. A prospective franchisee should carefully review the Development Agreement (if applicable) and any related transfer agreements to fully understand the fee implications.