For Checkersrallys, what is the definition of 'Restaurant Net Positive' in the context of the royalty fee abatement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
evant supporting documentation, that: (a) you are a current franchisee in good standing with us, including being in full compliance with all currently effective agreements with us or our affiliates; and (b) you will develop the Franchised Restaurant 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
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the term 'Restaurant Net Positive' is defined within the context of a royalty fee abatement incentive. This incentive is designed to encourage franchisees to open new restaurants quickly and in compliance with the brand's current reimaging standards.
Specifically, to qualify for the royalty fee abatement, a Checkersrallys franchisee, along with their owners or affiliates, must be 'Restaurant Net Positive' at the time the new franchised restaurant opens. The FDD defines 'Restaurant Net Positive' as the total number of restaurants operated by the franchisee, their owners, or their affiliates being greater at the time of the new restaurant's opening than the number of restaurants they operated as of December 30, 2024.
In simpler terms, Checkersrallys is offering a royalty fee abatement to franchisees who are expanding their operations. The abatement waives the royalty fee until it reaches a value of $75,000 or the restaurant has operated for 24 months. The FDD specifies that the number of restaurants operated as of December 30, 2024, will be disclosed in the actual agreement. This baseline is crucial for determining eligibility for the royalty fee abatement. A prospective franchisee should confirm this number with Checkersrallys to understand the growth required to qualify for the incentive.