What is the standard initial franchise fee for a Checkersrallys franchise?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
chise Agreement**
Initial Franchise Fee
The standard initial franchise fee is $30,000. If we have approved the location of the Franchised Restaurant prior to signing the Franchise Agreement, then you must pay the full amount of the initial franchise fee when you sign the Franchise Agreement. If we and you have not agreed upon an approved location of the Franchised Restaurant before signing the Franchise Agreement, then the initial franchise fee is payable as follows: $10,000 on the date you sign the Franchise Agreement; and the remaining $20,000 within 30 days of our approval of the location of the Franchised Restaurant.
If you sign the Franchise Agreement in connection with a Development Agreement, then the applicable portion of the development fee you paid under the Development Agreement toward the Franchised Restaurant will be credited against the initial franchise fee payable and due to us under the Franchise Agreement, according to that Development Agreement's terms. If you sign the Franchise Agreement and a Non-Traditional Site Addendum to operate the Franchised Restaurant from a Non-Traditional Site, then the initial franchise fee will be reduced to $15,000 as discussed below. If you sign the Franchise Agreement as part of your independent purchase of (or receipt of transferred ownerships interests in) the Franchised Restaurant's assets from a third party owner, then you will not pay us an initial franchise fee, but you must ensure that we receive the full amount of the associated transfer fee due to us as a result of that transaction (by way of example only, see successor franchise fee under Item 6).
In addition, should you qualify (as we solely determine) for any incentive programs or other sales promotions we are then offering in connection with sales of new franchises, or accelerated openings of franchises not yet opened (as the case may be), then your initial franchise fee or other applicable amounts due under the Franchise Agreement may be reduced according to conditions of that promotional offer (including signing an addendum to the
Franchise Agreement, as we may then require). We describe certain promotional offers currently in effect on the issuance date of this Franchise Disclosure Document below in this Item 5.
The initial franchise fee is fully earned by us on the effective date of the franchise agreement and is non-refundable, except that we may provide you a refund of 50% of the initial franchise fee if: (a) you (i) are unable to obtain a site acceptable to us within the Designated Area for the Franchised Restaurant within 180 days after the effective date of the franchise agreement, or (ii) despite having expended good faith best efforts (as we determine in our sole judgment), have not obtained all necessary permits, licenses, or other regulatory or municipal approvals to be able to open the Franchised Restaurant according to applicable law within 60 days after you sign the proposed lease, sublease, or purchase agreement for the location of the Franchised Restaurant; 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.
If you fail to pay the initial franchise fee before you open the Franchised Restaurant, then the amount of the initial franchise fee will increase by $500 per day on and after the opening date until we receive the full amount of the initial franchise fee, including all cumulative daily increases accruing since the opening date. These increases compensate us for our expenses, including the administrative and collection efforts with respect to the fee, and are not interest charges, time-price differentials or penalties for an overdue payment.
Asset Transfer Fee (on sale of company-owned Restaurant)
If your Franchise Agreement is for an existing Checkers Restaurant or Rally's Restaurant you are buying from us or our affiliate, then you must pay us a $10,000 asset transfer fee in addition to the initial franchise fee, payable on or before you close on the purchase of the Franchised Restaurant's assets. We may also impose the daily incremental late charge of $500 per day, as we describe above for a past-due initial franchise fee, if you do not pay the asset transfer fee before closing. This fee is full earned by us as of the effective date of the Franchise Agreement.
Source: Item 5 — INITIAL FEES (FDD pages 17–21)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the standard initial franchise fee is $30,000. This fee is payable in full when the Franchise Agreement is signed if Checkersrallys has already approved the restaurant location. However, if the location is not yet approved when the agreement is signed, the fee is split into two payments: $10,000 due upon signing the agreement, and the remaining $20,000 due within 30 days of location approval.
There are a few scenarios where this standard fee may be altered. If the franchise agreement is connected to a Development Agreement, a portion of the development fee may be credited towards the initial franchise fee. If the franchise is for a Non-Traditional Site, the initial franchise fee is reduced to $15,000. Also, franchisees buying an existing Checkersrallys restaurant from a third party do not pay the initial franchise fee but must ensure the transfer fee is paid.
Checkersrallys also offers incentive programs that could reduce the initial franchise fee. For example, the Vet Fran Incentive and the Women Business Owner Incentive can reduce the initial franchise fee to $0. Additionally, existing franchisees may qualify for a $10,000 reduction, effectively lowering the fee to $20,000, and those meeting specific growth criteria may receive a 50% reduction for their third and subsequent restaurants. It's important to note that the initial franchise fee is generally non-refundable, although a 50% refund may be available under specific conditions related to site approval or permit acquisition.