Under what condition can the Checkers franchise agreement be terminated due to non-payment of the initial franchise fee?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
t, then you agree to pay us an initial franchise fee of Thirty Thousand Dollars ($30,000) in two installments as follows:
Installment 1: Ten Thousand Dollars ($10,000) on the date you sign this
Agreement; and
Installment 2: the remaining Twenty Thousand Dollars ($20,000) within
30 days of our approval of the Premises.
If you fail, for whatever reason, to pay the initial franchise fee before the Franchised Restaurant is opened, the amount of the initial franchise fee shall increase by Five Hundred Dollars ($500) per day upon and after the opening date until we receive the full amount of the initial franchise fee, including all cumulative daily increases accruing since the opening date. You agree that such increases are to compensate us for
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, failure to pay the initial franchise fee when due constitutes grounds for termination of the Franchise Agreement. This means that if a franchisee does not pay the initial franchise fee as required by the agreement, Checkers has the right to terminate the agreement.
The initial franchise fee is $30,000 if the location is approved before signing the agreement. If the location is not approved before signing, the fee is also $30,000, but paid in two installments: $10,000 upon signing and the remaining $20,000 within 30 days of the premises being approved.
If the initial franchise fee is not paid before the restaurant opens, the amount increases by $500 per day from the opening date until the full amount is received. These increases are intended to cover Checkers's administrative and collection expenses and are not considered interest charges or penalties. Despite these increases, the failure to pay the initial franchise fee remains a valid reason for Checkers to terminate the agreement.