What is the transfer fee for a Checkersrallys franchise if the proposed transferee is a then-current franchisee?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
staurants, or otherwise incorporate into the System for all franchisees) and to add or replace fixtures, furniture, equipment, signs and supplies in accordance with our then current requirements and specifications for Restaurants within the time period we specify following the effective date of the transfer (we will advise the transferee before the effective date of the transfer of the specific actions that it must take and the time period within which such actions must be taken);
- (i) you must ensure that we receive, before we will approve any proposed transferee to begin conducting business activities at the Franchised Restaurant as its authorized operator, a transfer fee equal to Twenty Thousand Dollars ($20,000) (or, if the proposed transferee is a then-current franchisee of a Restaurant, a transfer fee equal to Ten Thousand Dollars ($10,000)), provided, however, if this Agreement is being transferred as part of a transaction involving franchise agreements for multiple Restaurants and the franchise agreement for eac
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the transfer fee for a franchise agreement is $10,000 if the proposed transferee is already a Checkersrallys franchisee. However, if the transfer involves multiple restaurants with franchise agreements transferred on the same day, the fee is $20,000 or $10,000 for the first restaurant (depending on whether the transferee is a new or existing franchisee), plus $5,000 for each additional restaurant included in the transfer.
This means that an existing Checkersrallys franchisee looking to acquire another location would generally pay a reduced transfer fee of $10,000. However, this benefit is contingent on the specific circumstances of the transfer, particularly if it's part of a larger transaction involving multiple locations. The transfer is subject to Checkersrallys's approval and other conditions outlined in the franchise agreement.
It's important for prospective franchisees to understand the conditions under which the transfer fee might revert to the higher amount of $20,000 or increase if multiple restaurants are involved. Franchisees should carefully review the franchise agreement and discuss any transfer plans with Checkersrallys to ensure compliance and avoid unexpected costs. This multi-restaurant transfer fee structure is not uncommon in the franchise industry, as it allows franchisors to account for the increased complexity and resources required to manage larger transactions.