When is the development fee considered earned by Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
ment entered into in connection with a renewal or transfer of a Restaurant.
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- For purposes of the chart in Section 3(a), above, a Restaurant that is permanently closed after having been opened, other than as a result of noncompliance by you with the terms of the applicable Franchise Agreement, shall be deemed open for a period of 6 months after the last day it was open for business, provided that: (i) during such period of time, you continuously and diligently take such ac
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the development fee is considered earned when paid. The FDD states that the development fee is non-refundable under any circumstances, including the franchisee's failure to develop the restaurants as planned.
For each Franchise Agreement that a franchisee enters into according to the development schedule, Checkersrallys will apply $10,000 of the development fee against the initial franchise fee due under the Franchise Agreement until the development fee is fully applied. The development fee represents $10,000 for each restaurant to be developed for which an initial franchise fee is due.
It is important to note that in certain states like Illinois and Maryland, Checkersrallys will defer collection of all initial fees, including the development fee, until they have completed all pre-opening obligations under the first franchise agreement and the franchisee has commenced business under that agreement. This deferral requirement in Illinois was imposed by the Illinois Attorney General's Office based on Checkersrallys's financial condition. Similarly, in Virginia, the Virginia State Corporation Commission requires deferral of the development fee until Checkersrallys completes its pre-opening obligations under the first franchise agreement.