What are the conditions to qualify for a reduction of the initial franchise fee for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, Franchisor has implemented an incentive program available to certain qualified franchisees that acquire and open new "Checkers" or "Rally's" restaurants or convert an existing restaurant to a "Checkers" or "Rally's" restaurant under which Franchisor offers qualified franchisees a temporary reduction on royalty fees and a reduction of initial franchise fees if the franchisee signs a Franchise Agreement on or before December 31, 2025 (the "2024 Growth Incentive" or "Incentive");
3. Conditional Development Incentive and Reduced Fee(s).
- b.
Reduction of Initial Franchise Fee: If you meet the conditions in 3(a) above, and you open 3 or more Restaurants that comply with the then-current reimaging requirements to the general public within 18 months of signing the applicable franchise agreement by December 31, 2026, then we will reduce the initial franchise fee payable for the third and subsequent Restaurants opened by fifty percent (50%).
WHEREAS, Franchisor has implemented an incentive program available to qualified existing franchisees of "Checkers" or "Rally's" restaurants under which the Initial Franchise Fee due under Franchisor's current form of franchise agreement is reduced by $10,000 if the franchisee opens its Restaurant within one (1) year of signing the Franchise Agreement (the "Existing Franchisee Incentive" or "Incentive");
WHEREAS, Franchisee is an existing franchisee under separate franchise agreements with Franchisor for the operation of at least two (2) "Checkers" or "Rally's" restaurants;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, there are a few ways to potentially qualify for a reduction of the initial franchise fee. One way is through the "2024 Growth Incentive", where Checkersrallys offers qualified franchisees a temporary reduction on royalty fees and a reduction of initial franchise fees if the franchisee signs a Franchise Agreement on or before December 31, 2025.
Another way to receive a reduction of the initial franchise fee is if the franchisee meets certain conditions related to opening restaurants quickly and complying with reimaging requirements. Specifically, if the franchisee meets the conditions in 3(a), which include opening the Franchised Restaurant to the general public within 18 months of signing the Franchise Agreement, complying with current reimaging requirements, and being Restaurant Net Positive, and opens 3 or more Restaurants that comply with the then-current reimaging requirements to the general public within 18 months of signing the applicable franchise agreement by December 31, 2026, then Checkersrallys will reduce the initial franchise fee payable for the third and subsequent Restaurants opened by fifty percent (50%).
Existing franchisees may also qualify for a $10,000 reduction of the initial franchise fee under the “Existing Franchisee Incentive” if they open their restaurant within one year of signing the Franchise Agreement. To qualify for this incentive, the franchisee must already operate at least two Checkersrallys restaurants under separate franchise agreements. To maintain eligibility for any reduced fees, the franchisee must remain in good standing and comply with all agreements. If the franchisee requests a transfer before opening the restaurant or fails to meet the specified criteria, they may be required to pay back the amount of the initial fee reduction.