Under what conditions can a Checkersrallys franchisee receive a 50% refund of the initial franchise fee?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 5 — INITIAL FEES (FDD pages 17–21)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, a franchisee may be eligible for a 50% refund of the initial franchise fee under specific circumstances. This refund is not automatic and is subject to certain conditions related to site acquisition and regulatory approvals.
The 2025 FDD states that Checkersrallys may provide a 50% refund of the initial franchise fee if the franchisee meets two primary conditions. First, the franchisee must be unable to secure a site acceptable to Checkersrallys within 180 days of the franchise agreement's effective date. Alternatively, the franchisee can qualify if, despite their best efforts, they fail to obtain all necessary permits, licenses, or other regulatory approvals to open the franchised restaurant within 60 days after signing the proposed lease, sublease, or purchase agreement for the restaurant location.
In addition to the above conditions, the franchisee and their owners must execute general releases, in a form and substance satisfactory to Checkersrallys, of any and all claims against Checkersrallys, its affiliates, officers, directors, employees, agents, successors, and assigns. This release protects Checkersrallys from potential legal action related to the failed opening. It is important to note that Checkersrallys has sole judgment in determining whether the franchisee has demonstrated good faith best efforts in obtaining the necessary approvals. This refund policy provides a limited safety net for franchisees who encounter significant obstacles in the initial stages of establishing their Checkersrallys restaurant, but it also underscores the importance of thorough due diligence and careful planning before entering into a franchise agreement.