When must a Checkersrallys franchisee submit a report of Net Sales for each Bi-weekly Period?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
11.02 Periodic Reports.You must furnish us: (a) no later than the fifth (5th) day following the end of each Bi-weekly Period, a report of Net Sales for such Biweekly Period; (b) no later than the fifteenth (15th) day following the end of each calendar month, an income statement and statement of cash flow for the Franchised Restaurant for such calendar month and for the year-to-date and a balance sheet as of the end of such month; (c) within ninety (90) days after the end of each Fiscal Year, a year-end balance sheet and income statement and statement of cash flow of the Franchised Restaurant for such Fiscal Year, reflecting all year-end adjustments and accruals; and (d) such other information as we may require at any time and from time to time, including food and labor cost reports and sales and income tax statements. You must verify that the information in each such report and financial statement is complete and accurate and sign it. We have the right to disclose data from such reports and statements if we consider disclosure advisable. We reserve the right to require that your annual financial statements be audited, at your expense, by an independent certified public accountant approved by us.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees must submit a report of Net Sales for each bi-weekly period no later than the fifth day following the end of that bi-weekly period. This means that Checkersrallys requires frequent sales reporting to monitor performance and calculate royalties.
This requirement ensures that Checkersrallys receives timely information about the franchisee's sales, which is essential for calculating royalty fees and assessing the overall financial health of the franchise. The bi-weekly reporting period aligns with the royalty payment schedule, as royalty fees are also due on the 5th and 20th of each month based on the preceding bi-weekly sales.
Failure to submit these reports on time or accurately can lead to penalties or even default under the franchise agreement. Specifically, the agreement states that failing to report Net Sales accurately or make payments, and not correcting it within ten days of written notice, can be a breach of contract. Also, understating Net Sales three or more times during the term, or by more than 5% on any single occasion, can also trigger penalties. Therefore, it is crucial for franchisees to maintain accurate records and adhere to the reporting schedule to avoid potential issues with Checkersrallys.