Under what conditions can a Checkers franchisee receive a 50% refund of the initial franchise fee?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
The initial franchise fee is fully earned by us on the effective date of the franchise agreement and is non-refundable, except that we may provide you a refund of 50% of the initial franchise fee if: (a) you (i) are unable to obtain a site acceptable to us within the Designated Area for the Franchised Restaurant within 180 days after the effective date of the franchise agreement, or (ii) despite having expended good faith best efforts (as we determine in our sole judgment), have not obtained all necessary permits, licenses, or other regulatory or municipal approvals to be able to open the Franchised Restaurant according to applicable law within 60 days after you sign the proposed lease, sublease, or purchase agreement for the location of the Franchised Restaurant; and (b) you and your owners execute general releases, in form and substance satisfactory to us, of any and all claims against us, and our affiliates, officers, directors, employees, agents, successors and assigns.
Source: Item 5 — INITIAL FEES (FDD pages 17–21)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, a franchisee may be eligible for a 50% refund of the initial franchise fee under specific circumstances. The standard initial franchise fee is $30,000, so a 50% refund would amount to $15,000.
To qualify for this refund, the franchisee must meet certain conditions related to site selection and obtaining necessary permits. Specifically, the franchisee must be unable to secure a site acceptable to Checkers within the designated area for the franchised restaurant within 180 days of the franchise agreement's effective date. Alternatively, the franchisee can qualify if, despite making good faith efforts, they cannot obtain all necessary permits, licenses, or other regulatory approvals to open the restaurant within 60 days after signing the lease, sublease, or purchase agreement for the location. Checkers retains sole judgment in determining whether the franchisee has demonstrated sufficient good faith efforts.
In addition to meeting the site and permit conditions, the franchisee and their owners must execute general releases. These releases must be in a form and substance satisfactory to Checkers, releasing any and all claims against Checkers, its affiliates, officers, directors, employees, agents, successors, and assigns. This requirement ensures that Checkers is protected from potential legal action in the event of a refund.