How much of the Checkersrallys development fee is credited towards the initial franchise fee for each restaurant?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
ised Restaurant's area.
Development Agreement
If we agree to grant you development rights, you and we will enter into a Development Agreement, which requires you to pay a development fee of $10,000 per restaurant to be developed. The number of restaurants to be developed pursuant to a Development Agreement varies depending upon a variety of factors, including (1) existing population and anticipated population growth within the Development Area; (2) competition within the Development Area; and (3) the number of Checkers Restaurants or Rally's Restaurants we estimate can be developed within the Development Area.
Under the Development Agreement, you are required to pay the then-current standard initial franchise fee for each Restaurant you are required to develop under a Development Agreement; however, $10,000 of the development fee is credited to the initial franchise fee payable for each Restaurant you are required to open under the Development Agreement until the development fee is credited in full. The development fee is not refundable, in whole or in part, except if we terminate the Development Agreement as a result of adverse franchise legislation. In this event, we will refund the uncredited portion of the development fee.
During our 2024 fiscal year, we did not collect a reduced development fee from
Source: Item 5 — INITIAL FEES (FDD pages 17–21)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee signs a Development Agreement, a portion of the development fee is credited towards the initial franchise fee for each restaurant. The Development Agreement requires a development fee of $10,000 per restaurant to be developed. The number of restaurants to be developed depends on factors such as population growth, competition, and the estimated number of viable Checkersrallys locations within the Development Area.
Specifically, $10,000 of the development fee is credited to the initial franchise fee for each restaurant required to open under the Development Agreement. This credit continues until the entire development fee has been applied. The development fee is generally non-refundable, but Checkersrallys will refund any uncredited portion if the Development Agreement is terminated due to adverse franchise legislation.
For a prospective Checkersrallys franchisee, this means that if they plan to develop multiple locations, the initial $10,000 per restaurant development fee contributes directly to offsetting the initial franchise fee for each location. This can significantly reduce the upfront costs associated with opening multiple Checkersrallys restaurants under a development agreement. It is important to note that during the 2024 fiscal year, Checkersrallys did not collect a reduced development fee from any franchisee that signed a Development Agreement.