Upon termination of the Checkersrallys agreement, is the development fee refundable, and if so, under what conditions?

According to Checkersrallys's 2025 Franchise Disclosure Document, the development fee is generally non-refundable upon termination of the agreement. However, there is a specific exception: Checkersrallys will refund the unapplied portion of the development fee if the termination occurs under Section 8.02(g) of the agreement. This section pertains to situations where new federal or state legislation, regulations, or rules enacted or amended after the agreement's effective date adversely affect Checkersrallys's rights, remedies, or discretion in franchising restaurants.

This means that if the agreement is terminated due to legislative or regulatory changes that negatively impact Checkersrallys's ability to franchise, a franchisee may be entitled to a refund of the unapplied portion of the development fee. The development fee itself is Ten Thousand Dollars ($10,000) for each restaurant to be developed. This fee is applied against the initial franchise fee due under the Franchise Agreement as each restaurant is opened according to the development schedule.

It is important for prospective Checkersrallys franchisees to understand the conditions under which a refund of the development fee is possible, as these circumstances are limited. Franchisees should carefully review Section 8.02(g) and related sections of the Franchise Agreement to fully understand their rights and obligations regarding the development fee and potential refunds. Additionally, franchisees should be aware that the development fee is deemed earned when paid, reinforcing the importance of understanding the specific conditions that could lead to a refund.