Under what conditions will Checkersrallys waive the royalty fee payable under the Franchise Agreement?
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 the franchisee meets certain criteria related to the opening timeline, restaurant appearance, and overall restaurant ownership status.
To qualify for the royalty fee waiver, the franchisee must open the franchised restaurant to the public within 18 months of signing the Franchise Agreement. The restaurant must also comply with the current reimaging requirements set by Checkersrallys. Additionally, the franchisee, their owners, or their affiliates must be "Restaurant Net Positive" at the time the franchised restaurant opens. This means that the total number of restaurants operated by these parties at the time of opening must be greater than the number they operated as of December 30, 2024. The exact number of restaurants operated as of December 30, 2024, is not specified in this excerpt.
If these conditions are met, Checkersrallys will waive the royalty fee until the earlier of two conditions: either the total value of the waived royalty fees reaches $75,000, or the franchised restaurant has been in operation for 24 months. This incentive is designed to encourage rapid and compliant development of new Checkersrallys locations. However, if the franchisee breaches or fails to satisfy any of these conditions, they will be required to pay back the amount of any fee reduction or benefit they received.