What is the relationship between the approved suppliers mentioned in Item 8 and the pre-opening assistance provided by Checkersrallys in Item 11 regarding restaurant development?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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- As discussed in Item 8, identify certain products and services, equipment and supplies that you must use to develop and operate your Franchised Restaurant, the minimum standards and specifications that you must satisfy, and the designated and approved suppliers from whom you must or may buy or lease these items (which may be limited to and/or include us, our affiliates, and/or other specified exclusive sources). (Franchise Agreement − Sections 3.05, 9.03 and 9.04)
You must select a site for your Franchised Restaurant that conforms to our standard site selection criteria and that we accept or reject pursuant to our standard franchise site package (see Item 11).
You are responsible for developing your Franchised Restaurant, for all expenses associated with it and for compliance with the requirements of any applicable federal, state or local law, code or regulation, including those concerning the Americans with Disabilities Act ("ADA") or similar rules governing public accommodations for persons with disabilities. You must exercise every reasonable effort to obtain all necessary governmental approvals for the development of the Franchised Restaurant in accordance with applicable laws. At your request, we will provide you with prototype plans, or other design materials, concerning build out for a Restaurant, for which we may require you to pay a fee. (Currently, none.) The plans are supplied as a draft only for your use in developing a final set of plans for construction of the Franchised Restaurant. You may modify those prototype plans only as required to ensure that the plans and all specifications comply with all applicable federal, state and local codes and regulations, ordinances, building codes and permit requirements and any lease requirements and restrictions. You may not make modifications to the dimensions or the exterior design of the building without our specific authorization. You must submit all modified plans and specifications to us for our approval before seeking municipal approval to develop the Premises. Our review and approval of your plans are not designed to assess compliance with federal, state or local laws and regulations, including the ADA, as compliance with such laws is your sole responsibility. At our request, you must submit all revised or "as built" plans and specifications. All development must be in accordance with the plans and specifications we have approved, and must comply with all applicable laws, ordinances and local rules and regulations. The architect and/or general contractor you use to design and construct the Franchised Restaurant must be approved by us in writing. Any archit
To ensure that high and uniform standards of quality and service are maintained, you are required to operate your Franchised Restaurant in strict conformity with our methods, standards and specifications and you are required to purchase goods, services, supplies, fixtures, equipment and inventory only from suppliers we have approved. You are not required to purchase or lease anything from us or any of our affiliates; however, we and our affiliates can be approved suppliers for items. Currently, we are not an approved supplier for any items except that we may from time to time sell used modular restaurants and restaurant equipment to Checkers and Rally's franchisees. We estimate the initial cost of all of required purchases and leases of goods, services, supplies, fixtures, equipment and inventory to be in excess of 95% of your total initial investment (see Item 7). We estimate the ongoing cost of these required purchases and leases to be in excess of 95% of your total ongoing operating expenses.
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Item 8 and Item 11 outline the relationship between approved suppliers and the franchisor's pre-opening assistance. Specifically, Item 11 states that Checkersrallys will identify certain products, services, equipment, and supplies that franchisees must use to develop and operate their franchised restaurant. These items must meet minimum standards and specifications and be purchased or leased from designated and approved suppliers. These suppliers may include Checkersrallys, its affiliates, or other exclusive sources. This is directly linked to the general requirements detailed in Item 8, which mandates that franchisees must purchase goods, services, supplies, fixtures, equipment, and inventory only from suppliers approved by Checkersrallys to maintain uniform standards of quality and service.
Checkersrallys provides guidance in Item 11 regarding the location and development of the franchised restaurant. Item 8 reinforces this by stating that the franchisee must select a site that conforms to Checkersrallys's standard site selection criteria, as referenced in Item 11. Furthermore, franchisees are responsible for developing their franchised restaurant and complying with all applicable laws and regulations. Checkersrallys may provide prototype plans for the build-out, but the franchisee is responsible for ensuring compliance with all codes and regulations. The architect and general contractor used for the construction must also be approved by Checkersrallys.
In summary, Checkersrallys maintains control over the development process by requiring franchisees to use approved suppliers for all essential goods and services, as detailed in Item 8. This requirement is integrated into the pre-opening assistance described in Item 11, where Checkersrallys specifies the products, services, and suppliers that franchisees must use. This ensures that all restaurants meet the franchisor's standards for quality and uniformity. A prospective franchisee needs to be aware that the initial and ongoing costs of these required purchases and leases from approved suppliers are estimated to be in excess of 95% of the total initial investment and ongoing operating expenses.