In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Checkers & Rally’s franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Checkers & Rally’s franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Checkers & Rally’s outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Checkers & Rally’s franchise opportunity

Section V – Presentation and analysis of Checkers & Rally’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, low, and high net sales for the 124 company-owned and 352 franchised Checkers Restaurants (and 111 company-owned and 166 franchised Rally’s Restaurants) that were open and operating for at least 350 days during the 52-week period ending January 1, 2024 (the “2023 Fiscal Year”)

• average, median, low, and high net sales during the first 52-week period of operations for the 2 company-owned and 37 franchised Checkers Restaurants (and 1 company-owned and 19 franchised Rally’s Restaurants) that opened between January 2021 and January 2024

• average net sales, food and paper costs, labor and benefit costs, gross margin, and royalties, occupancy and operating costs during the first full 12 months of operation for the 7 new company-owned Checkers and Rally’s Restaurants that were open and operating during the entire 2023 Fiscal Year

• 2023 average, median, high, and low net sales for the 61 Checkers Restaurants (and 19 Rally’s Restaurants) open less than 350 days during the 2023 fiscal year

Section VI – Key ratios, comparables, computations, and analyses for the Checkers & Rally’s franchise opportunity (exclusive content for Platinum subscribers)

Section I – Checkers & Rally’s Franchise Costs

• Initial Franchise Fee:  $20,000 to $30,000
• Initial Advertising Deposit:  $15,000
• Asset Transfer Fee:  $0 to $10,000
• Restaurant Building Costs:  $490,998 to $1,454,684
• Restaurant Equipment and Technology:  $35,000 to $305,000
• Soft Costs:  $10,000 to $225,625
• Signage Including Menu Boards:  $15,000 to $97,690
• Inventory:  $4,000 to $12,000
• Additional Funds – 3 Months:  $50,000 to $120,000
• Total Estimated Checkers & Rally’s Franchise Costs (exclusive of real estate and related costs):  $639,998 to $2,269,999

Section II – Checkers & Rally’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $15,000 to $30,000
• Royalty:  4% of Net Sales, or 2% of Net Sales if you operate a Restaurant from a Non-Traditional Site
• National Production Fund Contributions:  you will be required to pay up to 3% of Net Sales
• Advertising Expenditure Requirement:  4.5% of Net Sales
• Cooperative Advertising:  determined by your local or regional advertising cooperative

Section III – Number of Franchised and Company-Owned Checkers & Rally’s Outlets

Franchised

2021

• Outlets at the Start of the Year:  428
• Outlets at the End of the Year:  414
• Net Change:  -14

2022

• Outlets at the Start of the Year:  414
• Outlets at the End of the Year:  414
• Net Change:  0

2023

• Outlets at the Start of the Year:  414
• Outlets at the End of the Year:  378
• Net Change:  -36

Company-Owned

2021

• Outlets at the Start of the Year:  138
• Outlets at the End of the Year:  139
• Net Change:  +1

2022

• Outlets at the Start of the Year:  139
• Outlets at the End of the Year:  132
• Net Change:  -7

2023

• Outlets at the Start of the Year:  132
• Outlets at the End of the Year:  126
• Net Change:  -6

Section IV – News Updates on the Checkers & Rally’s Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Checkers & Rally’s Franchise (Item 19, 2024 FDD)

Part 1 – Statement of Average and Median Net Sales of Checkers Restaurants

• As used in this Item 19, “Net Sales” means all revenue derived from operating the Franchised Restaurant, including the aggregate of all sales amounts from food, beverages, and other products sold and services rendered at the Premises or otherwise rendered in connection with the Franchised Restaurant, and all monies derived from sales at or away from the Franchised Restaurant, whether from cash, check, credit or debit card, barter, exchange, trade credit, or other credit transactions, but: (1) excluding all federal, state, or municipal sales, use, or service taxes collected from customers and paid to the appropriate taxing authority; and (2) reduced by the amount of any documented refunds, credits, allowances, adjustments, promotional discounts, and charge-backs the Franchised Restaurant provides to customers in good faith.

Table A – All Checkers Restaurants

• Table A comprises Net Sales information for the 124 company-owned Checkers Restaurants and the 352 franchised Checkers Restaurants that were open and operating for at least 350 days during the 52-week period ending January 1, 2024 (the “2023 Fiscal Year”).

• Table A does not include the Net Sales for 10 company-owned Checkers Restaurants and 51 franchised Checkers Restaurants that were open for less than 350 days during the 2023 Fiscal Year and 25 franchised Checkers Restaurants that were previously considered temporarily closed but which are now permanently closed.

All Company-Owned

• Average Net Sales 2023 Fiscal Year:  $1,181,657
• Number of Restaurants:  124
• % Attaining or Exceeding Average:  60 or 48%
• Median Net Sales 2023 Fiscal Year:  $1,175,730
• Low Net Sales 2023 Fiscal Year:  $587,515
• High Net Sales 2023 Fiscal Year:  $1,889,817

All Franchised

• Average Net Sales 2023 Fiscal Year:  $1,099,430
• Number of Restaurants:  352
• % Attaining or Exceeding Average:  161 or 46%
• Median Net Sales 2023 Fiscal Year:  $1,072,227
• Low Net Sales 2023 Fiscal Year:  $260,171
• High Net Sales 2023 Fiscal Year:  $3,058,795

Site Built or Conversion Restaurant – Franchised

• Average Net Sales 2023 Fiscal Year:  $1,166,245
• Number of Restaurants:  301
• % Attaining or Exceeding Average:  131 or 44%
• Median Net Sales 2023 Fiscal Year:  $1,110,538
• Low Net Sales 2023 Fiscal Year:  $260,171
• High Net Sales 2023 Fiscal Year:  $3,058,795

End Cap Strip-Center & Gas/Convenience Restaurant – Franchised

• Average Net Sales 2023 Fiscal Year:  $613,490
• Number of Restaurants:  28
• % Attaining or Exceeding Average:  10 or 36%
• Median Net Sales 2023 Fiscal Year:  $582,020
• Low Net Sales 2023 Fiscal Year:  $273,765
• High Net Sales 2023 Fiscal Year:  $1,244,612

Non-Traditional, Walmart or In-Line Restaurant in High Density Market – Franchised

• Average Net Sales 2023 Fiscal Year:  $816,602
• Number of Restaurants:  23
• % Attaining or Exceeding Average:  12 or 52%
• Median Net Sales 2023 Fiscal Year:  $901,660
• Low Net Sales 2023 Fiscal Year:  $299,750
• High Net Sales 2023 Fiscal Year:  $1,438,753

Table B – First Year of Operations for New Checkers Restaurants

• Table B comprises Net Sales information during the first 52-week period of operations for the 2 company-owned Checkers Restaurants and the 37 franchised Checkers Restaurants that opened between January 2021 and January 2024.

• Table B does not include the Net Sales for 2 company-owned Checkers Restaurants and 10 franchised Checkers Restaurants because they did not have a full 52-week period of operation.

All Company-Owned

• Average Net Sales During First 52-Week Period of Operations:  $1,122,517
• Number of Restaurants:  2
• % Attaining or Exceeding Average:  1 or 50%
• Median Net Sales During First 52-Week Period of Operations:  $1,122,517
• Low Net Sales During First 52-Week Period of Operations:  $780,241
• High Net Sales During First 52-Week Period of Operations:  $1,464,793

All Franchised

• Average Net Sales During First 52-Week Period of Operations:  $1,232,695
• Number of Restaurants:  37
• % Attaining or Exceeding Average:  20 or 54%
• Median Net Sales During First 52-Week Period of Operations:  $1,294,318
• Low Net Sales During First 52-Week Period of Operations:  $319,740
• High Net Sales During First 52-Week Period of Operations:  $1,937,391

Site Built or Conversion Restaurant – Franchised

• Average Net Sales During First 52-Week Period of Operations:  $1,318,043
• Number of Restaurants:  33
• % Attaining or Exceeding Average:  17 or 52%
• Median Net Sales During First 52-Week Period of Operations:  $1,339,939
• Low Net Sales During First 52-Week Period of Operations:  $386,512
• High Net Sales During First 52-Week Period of Operations:  $1,937,391

End Cap Strip-Center & Gas/Convenience Restaurant – Franchised

• Average Net Sales During First 52-Week Period of Operations:  $492,890
• Number of Restaurants:  2
• % Attaining or Exceeding Average:  1 or 50%
• Median Net Sales During First 52-Week Period of Operations:  $492,890
• Low Net Sales During First 52-Week Period of Operations:  $396,634
• High Net Sales During First 52-Week Period of Operations:  $589,146

Non-Traditional, Walmart or In-Line Restaurant in High Density Market – Franchised

• Average Net Sales During First 52-Week Period of Operations:  $564,252
• Number of Restaurants:  2
• % Attaining or Exceeding Average:  1 or 50%
• Median Net Sales During First 52-Week Period of Operations:  $564,252
• Low Net Sales During First 52-Week Period of Operations:  $319,740
• High Net Sales During First 52-Week Period of Operations:  $808,763

Part 2 – Statement of Average and Median Net Sales of Rally’s Restaurants

Table A – All Rally’s Restaurants

• Table A comprises Net Sales information for the 111 company-owned Rally’s Restaurants and the 166 franchised Rally’s Restaurants that were open and operating for at least 350 days during the 2023 Fiscal Year.

• Table A does not include the Net Sales for the 11 company-owned Rally’s Restaurants and 8 franchised Rally’s Restaurants that were open for less than 350 days during the 2023 Fiscal Year.

All Company-Owned

• Average Net Sales 2023 Fiscal Year:  $1,086,489
• Number of Restaurants:  111
• % Attaining or Exceeding Average:  51 or 46%
• Median Net Sales 2023 Fiscal Year:  $1,052,378
• Low Net Sales 2023 Fiscal Year:  $586,581
• High Net Sales 2023 Fiscal Year:  $2,484,021

All Franchised

• Average Net Sales 2023 Fiscal Year:  $1,125,998
• Number of Restaurants:  166
• % Attaining or Exceeding Average:  73 or 44%
• Median Net Sales 2023 Fiscal Year:  $1,012,192
• Low Net Sales 2023 Fiscal Year:  $288,637
• High Net Sales 2023 Fiscal Year:  $2,409,124

Site Built or Conversion Restaurant – Franchised

• Average Net Sales 2023 Fiscal Year:  $1,154,616
• Number of Restaurants:  156
• % Attaining or Exceeding Average:  69 or 44%
• Median Net Sales 2023 Fiscal Year:  $1,047,467
• Low Net Sales 2023 Fiscal Year:  $332,457
• High Net Sales 2023 Fiscal Year:  $2,409,124

End Cap Strip-Center & Gas/Convenience Restaurant – Franchised

• Average Net Sales 2023 Fiscal Year:  $810,807
• Number of Restaurants:  5
• % Attaining or Exceeding Average:  2 or 40%
• Median Net Sales 2023 Fiscal Year:  $709,818
• Low Net Sales 2023 Fiscal Year:  $411,396
• High Net Sales 2023 Fiscal Year:  $1,450,161

Non-Traditional, Walmart or In-Line Restaurant in High Density Market – Franchised

• Average Net Sales 2023 Fiscal Year:  $548,319
• Number of Restaurants:  5
• % Attaining or Exceeding Average:  3 or 60%
• Median Net Sales 2023 Fiscal Year:  $634,219
• Low Net Sales 2023 Fiscal Year:  $288,637
• High Net Sales 2023 Fiscal Year:  $675,920

Table B – First Year of Operations for New Rally’s Restaurants

• Table B comprises Net Sales information during the first 52-week period of operations for the 1 company-owned Rally’s Restaurant and the 19 franchised Rally’s Restaurants that opened between January 2021 and January 2024 (each, a “New Rally’s Restaurant”).

• Table B does not include the Net Sales for 3 franchised Rally’s Restaurants because they did not have a full 52-week period of operation.

All Company-Owned

• Average Net Sales During First 52-Week Period of Operations:  $1,705,063
• Number of Restaurants:  1
• % Attaining or Exceeding Average:  1 or 100%
• Median Net Sales During First 52-Week Period of Operations:  $1,705,063
• Low Net Sales During First 52-Week Period of Operations:  $1,705,063
• High Net Sales During First 52-Week Period of Operations:  $1,705,063

All Franchised

• Average Net Sales During First 52-Week Period of Operations:  $1,351,215
• Number of Restaurants:  19
• % Attaining or Exceeding Average:  7 or 37%
• Median Net Sales During First 52-Week Period of Operations:  $1,280,696
• Low Net Sales During First 52-Week Period of Operations:  $597,533
• High Net Sales During First 52-Week Period of Operations:  $2,392,724

Site Built or Conversion Restaurant – Franchised

• Average Net Sales During First 52-Week Period of Operations:  $1,393,086
• Number of Restaurants:  18
• % Attaining or Exceeding Average:  7 or 39%
• Median Net Sales During First 52-Week Period of Operations:  $1,283,646
• Low Net Sales During First 52-Week Period of Operations:  $786,731
• High Net Sales During First 52-Week Period of Operations:  $2,392,724

End Cap Strip-Center & Gas/Convenience Restaurant – Franchised

• Average Net Sales During First 52-Week Period of Operations:  $597,533
• Number of Restaurants:  1
• % Attaining or Exceeding Average:  1 or 100%
• Median Net Sales During First 52-Week Period of Operations:  $597,533
• Low Net Sales During First 52-Week Period of Operations:  $597,533
• High Net Sales During First 52-Week Period of Operations:  $597,533

Part 3 – Statement of Gross Margin (First Year of Operations for New Company-Owned Checkers and Rally’s Restaurants)

• The Statement of Gross Margin for the New Company Checkers and Rally’s Restaurant consists of the reported Net Sales, food and paper costs, and labor and benefit costs for the 7 company-owned New Checkers and Rally’s Restaurants that were open and operating during the entire 2023 Fiscal Year (“New Company Restaurants”).

• The New Company Restaurants opened between January 2020 and January 2023 and the figures included below represent their operating expenses and Net Sales during each of their first full 13 periods of operation.

Average New Restaurant

• Net Sales:  $1,198,310 (100%)
• Food and Paper Costs:  $361,956 (30%)
• Labor and Benefit Costs:  $349,671 (29%)
• Gross Margin:  $486,683 (41%)
• Royalties, Occupancy, and Operating Costs:  $326,583 (27%)

• Food and Paper Costs. Food, paper, and packaging costs, less supplier rebates.

• Labor and Benefit Costs. Wages, bonuses, payroll taxes, workers’ compensation, medical insurance, and other benefits.

• Gross Margin equals Net Sales less food and paper costs and labor and benefit costs.

• Royalties, occupancy, and operating costs include rent, property taxes, marketing expenditures (NPF contributions, regional cooperative contributions, and Restaurant-specific promotions), utility costs (electricity, gas, water, and sewer), presumed royalties of 4% of Net Sales, and other routine expenses (maintenance and repairs, supplies, bank charges, uniforms, and other services).

• Restaurant-level EBITDA excludes multi-unit supervision costs typically charged against Restaurant costs for company-owned Checkers and Rally’s Restaurants.

• Each of the presented New Checkers and Rally’s Restaurants lease the location for their Checkers and Rally’s Restaurant and the average annual rent was $74,322 and the median annual rent was $82,510. Rental amounts can vary significantly due to local market factors.

• “EBITDA” means earnings before interest, taxes, depreciation, and amortization.

Part 4 – First Year of Operations for Company-Owned New Checkers and Rally’s Restaurants

• The table below comprises Net Sales information for the 51 franchised Checkers Restaurants, 10 company-owned Checkers Restaurants, 8 franchised Rally’s Restaurants, and 11 company-owned Rally’s Restaurants that were open and operating for less than 350 during the 2023 Fiscal Year.

• These restaurants were not open for 350 or more days because they were: (i) temporarily closed for remodeling; (ii) temporarily closed because of hurricane; (iii) temporarily closed for other issues (e.g., fire, staffing issues, or supply chain disruption); (iv) closed permanently at some point during the 2023 Fiscal Year; or (v) opened for business after the start of 2023 Fiscal Year.

• The table does not include the Net Sales for 25 franchised Checkers Restaurants that were previously considered temporarily closed but which are now permanently closed and which had no sales during the 2023 Fiscal Year.

Checkers Restaurants

• Average Net Sales 2023 Fiscal Year:  $502,694
• Number of Restaurants:  61
• % Attaining or Exceeding Average:  24 or 39%
• Median Net Sales 2023 Fiscal Year:  $353,700
• Low Net Sales 2023 Fiscal Year:  $5,385
• High Net Sales 2023 Fiscal Year:  $2,149,458

Rally’s Restaurants

• Average Net Sales 2023 Fiscal Year:  $548,648
• Number of Restaurants:  19
• % Attaining or Exceeding Average:  7 or 37%
• Median Net Sales 2023 Fiscal Year:  $409,844
• Low Net Sales 2023 Fiscal Year:  $30,238
• High Net Sales 2023 Fiscal Year:  $1,647,319

Section VI – Checkers & Rally’s Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️