Under what conditions will Checkersrallys waive the royalty fee?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
evant supporting documentation, that: (a) you are a current franchisee in good standing with us, including being in full compliance with all currently effective agreements with us or our affiliates; and (b) you will develop the Franchised Restaurant in accordance with our current prescribed plans, specifications and design model for Restaurants (including,
without limitation, any modifications or adjustments we authorize and timely introduce for similarly-situated Restaurants, or otherwise incorporate into the System for all franchisees, before you open the Franchised Restaurant).
3. Conditional Development Incentive and Reduced Fee(s).
- a. Royalty Fee Abatement: If you meet the following criteria: (i) you open the Franchised Restaurant to the general public within 18 months of signing the Franchise Agreement; (ii) the Franchised Restaurant complies with the current reimaging requirements and (iii) you, your owners, or your and their affiliates are Restaurant Net Positive (defined below) at the time the Franchised Restaurant opens, then we will waive the royalty fee payable under the Franchise Agreement until the earlier of: (a) the total value of the royalty fee abatement (calculated based
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, a royalty fee abatement is available under specific conditions. Checkersrallys will waive the royalty fee if a franchisee meets the following criteria: the franchised restaurant opens to the general public within 18 months of signing the Franchise Agreement, the restaurant complies with current reimaging requirements, and the franchisee (or their owners/affiliates) is "Restaurant Net Positive" at the time of opening. Restaurant Net Positive means the total number of restaurants operated by the franchisee, their owners, or their affiliates is greater than the number operated as of December 30, 2024.
The royalty fee waiver continues until the earlier of two conditions: either the total value of the waived royalty fees (calculated based on the standard royalty fee) reaches $75,000, or the franchised restaurant has been operating for 24 months. This incentive is designed to encourage rapid and compliant development of new Checkersrallys locations.
It's important to note that failure to meet or maintain these conditions can result in the franchisee being required to pay back the value of any royalty fee abatement received. Prospective franchisees should carefully evaluate their ability to meet these conditions and understand the implications of failing to do so. The specific number of restaurants operated by the franchisee, their owners, or their affiliates as of December 30, 2024, is not specified in this section but is a crucial factor in determining eligibility for the royalty fee abatement.