What is the maximum frequency that Checkersrallys can require a substantial remodel during any consecutive five-year period following a substantial upgrade or remodel?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
You must periodically upgrade and/or remodel the Franchised Restaurant in accordance with our current prescribed plans, specifications and design model for new 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), provided, however, we will not require substantial remodeling more than once during the first five (5) years of the Term, and in any case not more than once during the consecutive five (5)-year period immediately following any substantial upgrade or remodel we require you to make at any point during the Term (including during the first five (5) years). For purposes of this paragraph, by way of example only, if we require you to undertake a substantial upgrade or remodel of the Franchised Restaurant to be completed no later than December 31 during the second (2nd) year of the Term, then the next possible upgrade or remodel we could impose upon you would not be due any earlier than January 1 in
the seventh (7th) year of the Term. Any substantial remodeling you perform pursuant to this Section must be approved by us in advance as conforming with our current prescribed plans, specifications and design model for new Restaurants. If you fail to obtain our advance approval of any substantial remodeling, and such remodeling does not conform to our current prescribed plans, specifications and design model for new Restaurants, we reserve the right to require you to perform such additional remodeling as may be required to conform the Franchised Restaurant to our current prescribed plans, specifications and design model for new Restaurants.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the company will not require substantial remodeling more than once during any consecutive five-year period immediately following a substantial upgrade or remodel. This means that after a franchisee completes a significant remodel or upgrade, Checkersrallys cannot mandate another substantial remodel for at least five years.
For a prospective franchisee, this provides some predictability regarding capital expenditures. Knowing that a major remodel won't be required more than once every five years after an initial remodel allows for better financial planning. This can help in forecasting expenses and managing cash flow, as substantial remodels can be costly.
The FDD provides an example: if a substantial upgrade or remodel is completed by December 31 of the second year of the franchise term, the next possible upgrade or remodel Checkersrallys could impose would not be due any earlier than January 1 of the seventh year of the term. This example clarifies the timing and provides a concrete understanding of how the five-year period is calculated.
It is important to note that any substantial remodeling must be approved by Checkersrallys in advance to ensure it conforms to their current standards. Failure to obtain approval or to meet the required standards could result in Checkersrallys requiring additional remodeling to bring the restaurant into compliance. This underscores the importance of communicating and coordinating with Checkersrallys throughout any remodeling process.