Can Checkers vary the financial terms of the Franchise Agreement when selling company-owned restaurants?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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We may offer for sale, and sell as franchises, some company-owned Checkers Restaurants or Rally's Restaurants in certain geographic areas. In connection with these franchise transactions, we may retain franchise or business brokers to negotiate with a prospective franchisee to reach mutually acceptable terms of a separate sale of assets agreement and any sale, lease or sublease of the real estate. In addition, a Franchise Agreement for the purchased restaurant(s) will have to be signed (which, in addition to the normal initial franchise fee, will require payment of a $10,000 asset transfer fee – See Item 5) and, possibly, also a Development Agreement for the further development of Checkers Restaurants or Rally's Restaurants in the geographical area where the purchased restaurant(s) is/are located. Depending on the circumstances, we also may vary the financial and other terms of our Franchise Agreement and Development Agreement in connection with the sale of company-owned Checkers Restaurants or Rally's Re
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 9–14)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Checkers may offer for sale some company-owned Checkers or Rally's Restaurants as franchises. In these transactions, Checkers may use franchise brokers to negotiate mutually agreeable terms for the asset sale, real estate sale, lease, or sublease.
In addition to the standard initial franchise fee, a franchisee purchasing a company-owned restaurant will have to pay a $10,000 asset transfer fee. The franchisee may also need to sign a Development Agreement for further Checkers Restaurants development in the area where the purchased restaurant is located.
Importantly, Checkers retains the discretion to modify the financial and other terms of both the Franchise Agreement and the Development Agreement when selling company-owned restaurants. This means that the initial franchise fee, royalty fees, advertising fees, or other financial obligations could potentially be different from those outlined in the standard Franchise Agreement. Prospective franchisees should carefully review the specific terms offered for the purchase of any company-owned restaurant and compare them to the standard terms to fully understand the financial implications.