What is the reduced Initial Franchise Fee for Checkersrallys franchisees who qualify under this addendum?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| between | CHECKERS | DRIVE-IN | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| RESTAURANTS, INC., a Delaware corporation ("Franchisor," "we," "our," or "us"), and | ||||||||||
| ("you" or "your" or "Franchisee"). We and you may each | be referred to as a "Party," or collectively, the "Parties." |
R E C I T A L S
WHEREAS, Franchisor has implemented an incentive program available to qualified existing franchisees of "Checkers" or "Rally's" restaurants under which the Initial Franchise Fee due under Franchisor's current form of franchise agreement is reduced by $10,000 if the franchisee opens its Restaurant within one (1) year of signing the Franchise Agreement (the "Existing Franchisee Incentive" or "Incentive");
WHEREAS, Franchisee is an existing franchisee under separate franchise agreements with Franchisor for the operation of at least two (2) "Checkers" or "Rally's" restaurants;
| | WHEREAS, Franchisor | | | | and Franchisee are Parties to that certain Franchise Agreement | | | |---------|---------------------|-------------------------------------------------------------------------------------------|----|-----------|----------------------------------------------------------------|---------|----| | | | dated of even date herewith (the "Franchise Agreement") pursuant to which Franchisee will | | | | | | | operate | another | "Checkers" (the "Franchised Restaurant"); | or | "Rally's" | restaurant | located | at | WHEREAS, Franchisee desires to qualify for and receive, the benefits of the Incentive; and
WHEREAS, the Parties now desire to modify the Franchise Agreement according to the terms and conditions set forth in this Addendum.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
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- Relationship to Franchise Agreement; Recitals. This Addendum shall be annexed to and form a part of the Franchise Agreement. All capitalized terms not otherwise defined in this Addendum shall have the meanings set forth in the Franchise Agreement. Except as modified by this Addendum, the Franchise Agreement remains in full force and effect. Any conflict between the provisions hereof and the Franchise Agreement shall be construed in favor of this Addendum. All references in this Addendum to "Sections," "Subsections," and/or "Exhibits" shall mean the applicable Section(s), Subsection(s), and/or Exhibit(s) of the Franchise Agreement, unless specified otherwise below. The Recitals above are incorporated into this Addendum by reference.
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- Qualifications. You represent, and in connection with signing this Addendum have provided us (or agree to provide promptly upon our request) relevant 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 remain a franchisee in good standing, and comply with all currently effective agreements with us or our affiliates including the Franchise Agreement; and (c) you agree to open the Franchised Restaurant within one (1) year of signing the Franchise Agreement.
- Reduced Fee(s). In consideration of your qualification for the Incentive identified in the Recitals above, Section 6.01 is revised to reflect that the Initial Franchise Fee due is reduced by ten thousand dollars ($10,000) (the "Initial Fee Reduction") from the standard amount of the current initial franchise fee otherwise due for a new Restaurant.
4. Additional Condition(s).
- a. If, before you open the Franchised Restaurant, you request and we approve a transfer in accordance with Section 13 of the Franchise Agreement, then as a pre-closing condition of the transfer (in addition to any transfer fee payable) you must pay us the amount of the Initial Fee Reduction prior to the transfer.
- b.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the initial franchise fee can be reduced under certain incentive programs. For existing franchisees who qualify for the Existing Franchisee Incentive and open their restaurant within one year of signing the Franchise Agreement, the initial franchise fee is reduced by $10,000. For franchisees operating from a Non-Traditional Site, the initial franchise fee is reduced by $15,000.
Additionally, the FDD outlines incentive programs for specific groups. For franchisees who are women, or where at least 51% ownership is held by a woman, the initial franchise fee is reduced to $0, representing a 100% reduction. Similarly, for franchisees who are veterans of the United States military with an honorable discharge, the initial franchise fee is also reduced to $0, which is a 100% reduction of the standard fee.
It is important to note that these reductions are subject to specific qualifications and conditions outlined in the addendum to the franchise agreement. Failure to meet these conditions can result in the franchisee being required to pay the full standard initial franchise fee. These conditions include remaining in good standing with Checkersrallys and complying with all agreements. Furthermore, if a transfer is requested and approved before the restaurant opens, the franchisee may have to pay the full initial franchise fee that was originally reduced or waived.