Checkers & Rally's Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$169,000

-

$2,126,000

LOCATIONS

834

Emily

Updated

April 11, 2024

Is

Checkers & Rally's

a franchise?

Yes,
Checkers & Rally's
currently
accepts
franchise
applications

Checkers & Rally's, although they started as separate entities, have a shared history in the fast-food industry. Rally's was founded first in Tennessee in 1984, and Checkers followed in Alabama in 1986. The two brands officially merged in 1999 through a stock-swap deal, consolidating their operations and beginning to operate under a unified corporate structure with headquarters in Florida.

The franchise has established itself as a formidable player, offering a unique drive-thru experience that stands out in the competitive market. The franchise system includes numerous multi-unit franchisees, highlighting the brand's significant growth potential and its commitment to expanding its reach affordably across various markets.

One of the key differentiators for Checkers & Rally's is its focus on efficient building designs for its drive-thru restaurants, which are designed to offer compelling unit economics. This approach not only facilitates great cash flow but also emphasizes the brand's adaptability and innovative edge in managing its operations through a drive-thru, e-commerce lane, and walk-up window.

The brand prides itself on its unwavering core values, which include a heart for service, giving 100%, and operating with a can-do attitude, fostering a magnetic culture that resonates with both franchisees and customers. Moreover, Checkers & Rally's is committed to restaurant operations, with over 30 years in the business focusing on franchisee profitability and community engagement.

How many

Checkers & Rally's

franchises

are there?

In 2022, there were
834
outlets in
the United
States, of which
568
are franchises, and
266
are corporate-owned.

What are the

Checkers & Rally's

franchise

fees?

Advertising fee

4.50%

Initial Franchise Fee ($30,000)

The initial franchise fee for Checkers & Rally's is $30,000. This fee grants the franchisee the right to operate a single Checkers or Rally's restaurant under the terms and conditions of the franchise agreement.

Royalty Fee (4.5% of Net Sales)

Franchisees are required to pay a royalty fee of 4.5% of their net sales. This fee is for the continued use of the Checkers & Rally's brand, systems, and ongoing support provided by the franchisor.

Advertising Fee (Up to 4.5% of Net Sales)

Franchisees must contribute to the National Production Fund (NPF) amounts that are established by the franchisor from time to time, not to exceed 3% of Net Sales. These contributions are used for the creation and production of marketing materials and preparation of advertising campaigns.

Additionally, franchisees are required to spend on advertising and promoting their franchised restaurant. The total advertising expenditure, including contributions to the NPF and other advertising cooperatives, should not exceed 4.5% of Net Sales during each fiscal quarter.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Checkers & Rally's

franchise?

It costs between
$169,000
and
$2,126,000
to start a
Checkers & Rally's
franchise.
Type of Expenditure Amount
Initial Franchise Fee $20,000 - $30,000
Initial Advertising Deposit $10,000
Restaurant Building Costs $440,000 - $1,400,626
Restaurant Building Shipping Costs $8,400 - $49,660
Restaurant Equipment & Technology $186,626 - $313,052
Soft Costs (see Note 3) $3,500 - $27,000
Signage including Menuboards $41,591 - $75,184
Inventory $1,000 - $5,000
Additional Funds - 3 Months $40,000 - $90,000
Total (excluding real estate costs) $751,117 - $2,000,522

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Checkers & Rally's

provide

training

to its

franchisees?

Yes,
Checkers & Rally's
provides
training

Checkers & Rally's are committed to ensuring that their franchisees are well-equipped to maintain the brand's standards and serve their customers effectively. Here's a closer look at their training approach:

Initial Training:

  • As part of their onboarding process, franchisees are introduced to the Checkers & Rally's system, which encompasses the brand's business methods, designs, equipment, ingredients, recipes, methods of preparation, and other operational standards.
  • This training is designed to provide franchisees with a comprehensive understanding of how to operate a Checkers & Rally's restaurant, ensuring consistency across all locations.

Training Supervision and Materials:

  • The training is overseen by experienced professionals to ensure that it aligns with the brand's standards and imparts practical knowledge.
  • Franchisees are provided with a range of instructional materials, including production manuals, online training modules, and other written materials tailored for the initial training program.

Does

Checkers & Rally's

provides

territory

protection?

Franchisees are granted the right to own and operate a Restaurant at a specific location. If a location for the Restaurant has not been agreed upon prior to signing the Franchise Agreement, franchisees must select a location within a designated area, known as the "Designated Area."

The Designated Area is appointed solely for site selection and does not confer any territorial exclusivity or protection to the franchisees. Additionally, franchisees may receive a territory with limited protected rights, referred to as a "Protected Area."

During the term of the Franchise Agreement, Checkers & Rally's will not establish or operate, nor license any other person to establish or operate, a Restaurant within this Protected Area. However, there are no restrictions on Checkers & Rally's from soliciting or accepting orders from customers using the Marks or any other trademarks.

Can a

Checkers & Rally's

franchise

be run as

a passive

investment?

Franchisees of Checkers & Rally's are expected to exert their full-time and best efforts to the development and operation of the Franchised Restaurant. If the franchisee is an entity, an "Operating Partner" must be designated.

This Operating Partner should have the authority to make operational decisions regarding the Franchised Restaurant and must complete the company's training program to its satisfaction.

The franchisee or the Operating Partner cannot engage in any other business or activity that requires substantial management responsibility or conflicts with their obligations under the Franchise Agreement.

Furthermore, the Franchised Restaurant must always be under the direct, on-premises supervision of either the franchisee, the Operating Partner, or a manager who has successfully completed the company's training program.

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