Under what conditions will Checkers waive the royalty fee payable under the Franchise Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
staurant in accordance with our current prescribed plans, specifications and design model for Restaurants (including,
without limitation, any modifications or adjustments we authorize and timely introduce for similarly-situated Restaurants, or otherwise incorporate into the System for all franchisees, before you open the Franchised Restaurant).
3. Conditional Development Incentive and Reduced Fee(s).
- a. Royalty Fee Abatement: If you meet the following criteria: (i) you open the Franchised Restaurant to the general public within 18 months of signing the Franchise Agreement; (ii) the Franchised Restaurant complies with the current reimaging requirements and (iii) you, your owners, or your and their affiliates are Restaurant Net Positive (defined below) at the time the Franchised Restaurant opens, then we will waive the royalty fee payable under the Franchise Agreement until the earlier of: (a) the total value of the royalty fee abatement (calculated based on the standard royalty fee due under the Franchise Agreement) equals Se
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, a royalty fee abatement is available under specific conditions. Checkers will waive the royalty fee if the franchisee meets certain criteria related to the opening timeline, restaurant appearance, and overall restaurant ownership.
Specifically, to qualify for the royalty fee waiver, the franchisee must open the franchised restaurant to the general public within 18 months of signing the Franchise Agreement. Additionally, the restaurant must comply with the current reimaging requirements set by Checkers. The franchisee, their owners, or their affiliates must also be "Restaurant Net Positive" at the time the franchised restaurant opens, meaning they operate more restaurants than they did as of December 30, 2024.
If all these conditions are met, Checkers will waive the royalty fee until the earlier of two scenarios: either the total value of the waived royalty fees reaches $75,000, or the franchised restaurant has been in operation for 24 months. However, if the franchisee breaches or fails to satisfy any of these conditions during the term of the agreement, they must pay Checkers the amount of the royalty fees that were previously waived. This incentive is part of the 2024 Growth Incentive program, which aims to encourage the opening of new Checkers restaurants.