When are royalty fees due for a Checkersrallys franchise?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
be able to open the Franchised Restaurant in accordance with applicable law within sixty (60) days after your execution of the proposed lease, sublease or purchase agreement for the Premises; and (b) you and your Owners execute general releases, in form and substance satisfactory to us, of any and all
claims against us, and our Affiliates, officers, directors, employees, agents, successors and assigns.
- 6.02 Royalty Fees.You agree to pay us royalty fees of four percent (4%) of Net Sales, payable on or before the fifth (5th) and twentieth (20th) days of each calendar month with respect to the Net Sales accrued during the most recently ended Bi-weekly Period before the payment date.
- 6.03 Sublease Administrative Fee. If we agree to sublease the Premises of your Franchised Restaurant to you and remain on the master lease, then we will charge you a sublease administrative fee of up to 10% of the rent that remains due under the then-current lease term in consideration of our remaining a guarantor on the lease.
- 6.04 Interest On Late Payments.All amounts which you owe us or any of our Affiliates for any reason, including amounts payable into the NPF (as provided in Sections 3.05 and 10.01), shall bear interest accruing as of their original due date at the maximum interest rate permitted by law, If there is no applicable legal maximum rate, interest will be calculated at the rate of four percent (4%) above the prime rate of interest on the first day of each month for the past due amount, as published in The Wall Street Journal.
- 6.05 Automatic Clearing House Agreement. You agree, at our request, to sign an electronic payment authorization agreement in a form we prescribe that authorizes us to automatically debit your bank account, on the dates payments are due, for any royalty fees, rents, the Initial Advertising Deposit and other amounts due and owing under this Agreement and any other agreements between you and us. You agree to ensure that funds are available in your bank account to cover our withdrawals. If there are insufficient funds in your bank account to cover any such amount owed (or, if you are paying by check and a check is returned for insufficient funds), you must pay us, on demand, a processing fee of Two Hundred Fifty Dollars ($250).
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, royalty fees are 4% of Net Sales. These fees are payable on or before the fifth and twentieth day of each calendar month. The fees apply to Net Sales accrued during the bi-weekly period that ended most recently before the payment date.
Checkersrallys may request that franchisees sign an electronic payment authorization agreement allowing them to automatically debit the franchisee's bank account for royalty fees and other amounts owed. If a franchisee's account has insufficient funds to cover the withdrawal, or if a check is returned for insufficient funds, Checkersrallys can charge a $250 processing fee. In such cases, Checkersrallys may require all subsequent payments to be made via certified check.
Notably, Checkersrallys offers a royalty fee abatement under certain conditions. If a franchisee opens their restaurant within 18 months of signing the Franchise Agreement, complies with reimaging requirements, and meets the Restaurant Net Positive criteria, Checkersrallys will waive the royalty fee. This waiver continues until the royalty fee abatement equals $75,000 or the restaurant has operated for 24 months, whichever comes first. Franchisees should be aware that failure to meet the specified criteria can result in the loss of reduced fee benefits and may require payment of the standard fee amounts.