What is the maximum royalty fee abatement amount Checkersrallys offers?
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
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, a new franchisee may qualify for a royalty fee abatement under certain conditions. If the franchisee opens their restaurant to the public within 18 months of signing the Franchise Agreement, complies with current reimaging requirements, and is considered 'Restaurant Net Positive' at the time of opening, Checkersrallys will waive royalty fees.
The royalty fee abatement continues until the total value of waived fees reaches $75,000, calculated based on the standard royalty fee, or until the restaurant has been operating for 24 months, whichever comes first. The term 'Restaurant Net Positive' means that the total number of restaurants operated by the franchisee, their owners, or their affiliates is greater than the number operated as of December 30, 2024.
This incentive is conditional, and Checkersrallys can reclaim the waived royalty fees if the franchisee fails to meet the specified criteria at any point during the term. This could significantly impact the franchisee's financial obligations, as they would be required to pay back the abated amount within 30 days of written notice from Checkersrallys. Prospective franchisees should carefully evaluate their ability to meet these conditions and the potential financial implications of failing to do so.