Under what conditions might Checkers provide special assistance to franchisees, and what are the associated costs?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
4. Additional Condition(s).
- a. If, before you open the Franchised Restaurant, you request and we approve a transfer in accordance with Section 13, then as a pre-closing condition of the transfer (in addition to any transfer fee payable) you must pay us the full standard amount of the initial franchise fee (as measured on the Effective Date of your Franchise Agreement) that was reduced or waived pursuant to this Addendum.
- b. If you breach, fail to satisfy, or are later found to have violated or failed to satisfy, any of the criteria listed in Section 2 above in this Addendum, at any point during the Term, then in addition to any other remedies available under the Franchise Agreement (including termination) or at applicable law, you must pay us (no later than thirty (30) days after our written notice to you) the amount or value of any fee reduction, discount, or other benefit afforded to you hereunder.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, franchisees may receive a reduction of the initial franchise fee under certain conditions, as detailed in an addendum to the franchise agreement. However, this reduction is contingent upon meeting specific criteria outlined in Section 2 of the addendum.
If a Checkers franchisee requests a transfer before opening their restaurant and Checkers approves it, the franchisee must pay back the amount of the initial fee reduction as a pre-closing condition, in addition to any transfer fees. Furthermore, if a franchisee breaches, fails to satisfy, or is found to have violated any of the criteria in Section 2 of the addendum, they must pay Checkers the amount of the initial fee reduction, plus the value of any royalty fee reduction, discount, or any other benefit they received. This payment is due no later than 30 days after receiving written notice from Checkers. The amount will be measured against the standard fee amount specified for new franchisees on the effective date of the Franchise Agreement.
These conditions highlight that any initial benefits or reductions in fees are subject to the franchisee's compliance with the terms of the agreement and the addendum. Failure to meet these conditions can result in the franchisee being required to repay the reduced amounts, potentially increasing their financial obligations to Checkers. Prospective franchisees should carefully review the criteria in Section 2 of the addendum to understand the specific requirements and avoid potential penalties.