Checkers
Checkers offers franchises to operate restaurants serving hamburgers, cheeseburgers, hot dogs, and other menu items. Known for quick-service dining, Checkers operates in the fast-food industry alongside competitors like McDonald's and Burger King.
About Checkers
Checkers Drive-In Restaurants, Inc. is an American fast food double drive-through chain franchise in the United States. The company operates Checkers and Rally's restaurants in 20 states and the District of Columbia. They specialize in hamburgers, hot dogs, french fries, milkshakes, and drinks.
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Checkers franchise FAQ
How much does it cost to open one — the total initial investment?
The total estimated initial investment for opening a Checkers Restaurant or Rally's Restaurant, excluding real estate and related costs, ranges from $514,920 to $2,132,493 for a modular design drive-thru restaurant, $683,372 to $1,479,774 for a conversion restaurant, $1,064,657 to $1,877,201 for a site-built restaurant, $383,370 to $1,320,538 for an endcap restaurant, $601,725 to $1,066,979 for an inline restaurant in a high-density market, and $123,630 to $725,538 for a gas station/convenience store, Non-Traditional, or Walmart restaurant. [p.1]
What is the initial franchise fee?
The initial franchise fee varies based on certain conditions. Generally, it starts at $30,000 but can be reduced by up to $25,000 under specific circumstances [p.17, p.187, p.179]. This isn't specified in the excerpts.
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is typically 4% of Net Sales, but there can be a reduced rate of 2% for the first twelve months following a full scope reimage that meets certain criteria. Additionally, you must contribute up to 3% of Net Sales to the National Production Fund (NPF) semi-monthly, alongside royalty fees. [p.131, p.49]
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement isn't specified in the excerpts. Additionally, regarding renewal, if you have the right to acquire a successor franchise, you may be able to do so under certain conditions, but the exact terms for renewal are not detailed here. For specific information on renewal terms and conditions, you would need to refer to Section 15.03 of the FDD [p.143].
Can I sell or transfer my franchise, and what does that require?
According to [p.353], a provision permits the franchisor to refuse to permit a transfer of ownership of a franchise except for good cause. Good cause includes but is not limited to unspecified factors. This isn't specified in the excerpts.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so [p.352]. Additionally, termination may occur if there is a breach by you or your Owners or Affiliates that gives the franchisor the right to terminate the Franchise Agreement [p.216]. This isn't specified in the excerpts for other specific grounds of termination.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
No exclusive territory is provided. However, you may receive a limited protected area if your franchise restaurant is located in a specific type of geographic area as defined by the company [p.57]. For Non-Traditional Sites, no territorial protection or exclusivity is given [p.189]. Additionally, under a Development Agreement, you have the right to develop a certain number of restaurants within a designated area, but this does not provide territorial exclusivity either [p.59].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program for new franchisees or operators who have not managed a Checkers or Rally's restaurant in the last 18 months [p.39, p.40]. This includes up to two attendees at no cost and additional attendees may incur fees [p.39]. The franchisor also offers on-site support during pre-opening, opening, and post-opening activities for new Franchised Restaurants, with a maximum of 10 days in total [p.117]. Additionally, the franchisor may send up to three representatives for on-site assistance if requested [p.57].
How many franchised outlets are there, and how many have closed or been terminated?
There are a total of 61 franchised Checkers Restaurants. According to [p.75], 29 franchised Checkers Restaurants were previously considered temporarily closed but are now permanently closed. This isn't specified in the excerpts for Rally's Restaurants regarding terminations, so we cannot provide an exact number for terminated outlets specifically related to Rally's.
Does the franchisor share any financial performance or earnings information?
The franchisor can provide financial performance information if there is a reasonable basis for it, and this information must be included in the Franchise Disclosure Document [p.72]. However, the franchisor does not make any financial performance representations other than those specified in Item 19, nor do they authorize their employees or representatives to make such representations [p.77].
What am I restricted to selling, and where must I buy supplies?
You are required to sell all food, beverage, and other products and services determined by the franchisor from time to time. Additionally, you may have to purchase or lease certain items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than alternatives [p.4]. This isn't specified in the excerpts for exact details on supplies, but it implies you must use specific products and services as outlined by the franchisor [p.48].