Checkers & Rally’s is a fast food franchise. Created through the merger of two separate restaurant chains, it operates restaurants under the name of either Checkers or Rally’s, depending upon the region. The company focuses on the carryout market, and most locations don’t have indoor seating areas, though a few locations have retained these from earlier eras.
Its menu consists of classic American takeout food, including burgers, hot dogs, and chicken, with seasoned fries as its signature dish. The company takes so much pride in the fries that customers are offered free fries if they report a bad batch, an offer that helps the company keep an eye out for wider problems at its restaurants.
The company is looking for ways to improve its franchises and so expand its impact, and has recently revamped the prototype for its restaurants. This means a smaller footprint, reducing construction and running costs and so making things easier for franchisees.
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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 2025 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 2025 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 2022, 2023, and 2024, based on Item 20 of the company’s 2025 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 2025 FDD, including information on the:
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- 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 10 franchised Rally’s Restaurants) that opened between January 2022 and December 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 2 new company-owned Checkers and Rally’s Restaurants that were open and operating during the entire 2024 Fiscal Year
- 2024 average, median, high, and low net sales for the 66 Checkers Restaurants (and 18 Rally’s Restaurants) open less than 350 days during the 2024 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
- Checkers & Rally’s (modular design drive-thru restaurant) franchise costs, based on Item 7 of the company’s 2025 FDD:
- Initial Franchise Fee: $20,000 to $30,000
- Initial Advertising Deposit: $15,000
- Asset Transfer Fee: $0 to $10,000
- Restaurant Building Costs: $354,653 to $1,292,640
- Restaurant Equipment and Technology: $42,153 to $329,538
- Soft Costs: $17,200 to $225,625
- Signage Including Menu Boards: $11,914 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): $514,920 to $2,132,493
Section II – Checkers & Rally’s Initial Franchise Fee, Royalty Fee, and Marketing Fee
- Checkers & Rally’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2025 FDD:
- 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 (currently, 2.65% of your 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
2022
- Outlets at the Start of the Year: 413
- Outlets at the End of the Year: 413
- Net Change: 0
2023
- Outlets at the Start of the Year: 413
- Outlets at the End of the Year: 379
- Net Change: -34
2024
- Outlets at the Start of the Year: 379
- Outlets at the End of the Year: 362
- Net Change: -17
Company-Owned
2022
- Outlets at the Start of the Year: 139
- Outlets at the End of the Year: 132
- Net Change: -7
2023
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- Outlets at the End of the Year: 126
- Net Change: -6
2024
- Outlets at the Start of the Year: 126
- Outlets at the End of the Year: 122
- Net Change: -4
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, 2025 FDD)
Part 1 – Statement of Average 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 121 company-owned Checkers Restaurants and the 335 franchised Checkers Restaurants that were open and operating for at least 350 days during the 52-week period ending December 30, 2024 (the “2024 Fiscal Year”).
- Table A does not include the Net Sales for 2 company-owned Checkers Restaurants and 27 franchised Checkers Restaurants that were open for less than 350 days during the 2024 Fiscal Year. Table A also excludes 3 company-owned and 35 franchised Checkers Restaurants that were closed during the 2024 Fiscal Year.
All Company-Owned
- Average Net Sales 2024 Fiscal Year: $1,133,956
- Number of Restaurants: 121
- % Attaining or Exceeding Average: 59 or 49%
- Median Net Sales 2024 Fiscal Year: $1,129,732
- Low Net Sales 2024 Fiscal Year: $653,195
- High Net Sales 2024 Fiscal Year: $1,772,594
All Franchised
- Average Net Sales 2024 Fiscal Year: $1,100,000
- Number of Restaurants: 335
- % Attaining or Exceeding Average: 154 or 46%
- Median Net Sales 2024 Fiscal Year: $1,076,326
- Low Net Sales 2024 Fiscal Year: $216,109
- High Net Sales 2024 Fiscal Year: $2,951,270
Site Built or Conversion Restaurant – Company-Owned
- Average Net Sales 2024 Fiscal Year: $1,133,956
- Number of Restaurants: 121
- % Attaining or Exceeding Average: 59 or 49%
- Median Net Sales 2024 Fiscal Year: $1,129,732
- Low Net Sales 2024 Fiscal Year: $653,195
- High Net Sales 2024 Fiscal Year: $1,772,594
Site Built or Conversion Restaurant – Franchised
- Average Net Sales 2024 Fiscal Year: $1,171,040
- Number of Restaurants: 287
- % Attaining or Exceeding Average: 131 or 46%
- Median Net Sales 2024 Fiscal Year: $1,133,255
- Low Net Sales 2024 Fiscal Year: $298,612
- High Net Sales 2024 Fiscal Year: $2,951,270
End Cap Strip-Center & Gas/Convenience Restaurant – Franchised
- Average Net Sales 2024 Fiscal Year: $570,041
- Number of Restaurants: 27
- % Attaining or Exceeding Average: 12 or 44%
- Median Net Sales 2024 Fiscal Year: $570,212
- Low Net Sales 2024 Fiscal Year: $216,109
- High Net Sales 2024 Fiscal Year: $1,161,495
Non-Traditional, Walmart or In-Line Restaurant in High Density Market – Franchised
- Average Net Sales 2024 Fiscal Year: $810,503
- Number of Restaurants: 21
- % Attaining or Exceeding Average: 10 or 48%
- Median Net Sales 2024 Fiscal Year: $796,429
- Low Net Sales 2024 Fiscal Year: $279,523
- High Net Sales 2024 Fiscal Year: $1,379,592
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 2022 and December 2024.
- Table B does not include the Net Sales for 18 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: $1,240,612
- Number of Restaurants: 2
- % Attaining or Exceeding Average: 1 or 50%
- Median Net Sales During First 52-Week Period of Operations: $1,240,612
- Low Net Sales During First 52-Week Period of Operations: $1,204,039
- High Net Sales During First 52-Week Period of Operations: $1,277,185
All Franchised
- Average Net Sales During First 52-Week Period of Operations: $1,342,443
- Number of Restaurants: 37
- % Attaining or Exceeding Average: 20 or 54%
- Median Net Sales During First 52-Week Period of Operations: $1,379,618
- Low Net Sales During First 52-Week Period of Operations: $396,634
- High Net Sales During First 52-Week Period of Operations: $1,937,391
Site Built or Conversion Restaurant – Company-Owned
- Average Net Sales During First 52-Week Period of Operations: $1,240,612
- Number of Restaurants: 2
- % Attaining or Exceeding Average: 1 or 50%
- Median Net Sales During First 52-Week Period of Operations: $1,240,612
- Low Net Sales During First 52-Week Period of Operations: $1,204,039
- High Net Sales During First 52-Week Period of Operations: $1,277,185
Site Built or Conversion Restaurant – Franchised
- Average Net Sales During First 52-Week Period of Operations: $1,390,989
- Number of Restaurants: 35
- % Attaining or Exceeding Average: 18 or 51%
- Median Net Sales During First 52-Week Period of Operations: $1,556,510
- Low Net Sales During First 52-Week Period of Operations: $591,306
- 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
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 106 company-owned Rally’s Restaurants and the 163 franchised Rally’s Restaurants that were open and operating for at least 350 days during the 2024 Fiscal Year.
- Table A does not include the Net Sales for the 1 company-owned Rally’s Restaurant and 7 franchised Rally’s Restaurants that were open for less than 350 days during the 2024 Fiscal Year.
All Company-Owned
- Average Net Sales 2024 Fiscal Year: $1,082,477
- Number of Restaurants: 106
- % Attaining or Exceeding Average: 48 or 45%
- Median Net Sales 2024 Fiscal Year: $1,052,585
- Low Net Sales 2024 Fiscal Year: $568,461
- High Net Sales 2024 Fiscal Year: $2,368,146
All Franchised
- Average Net Sales 2024 Fiscal Year: $1,123,037
- Number of Restaurants: 163
- % Attaining or Exceeding Average: 67 or 41%
- Median Net Sales 2024 Fiscal Year: $1,029,375
- Low Net Sales 2024 Fiscal Year: $261,668
- High Net Sales 2024 Fiscal Year: $2,458,827
Site Built or Conversion Restaurant – Company-Owned
- Average Net Sales 2024 Fiscal Year: $1,082,477
- Number of Restaurants: 106
- % Attaining or Exceeding Average: 48 or 45%
- Median Net Sales 2024 Fiscal Year: $1,052,028
- Low Net Sales 2024 Fiscal Year: $568,461
- High Net Sales 2024 Fiscal Year: $2,368,146
Site Built or Conversion Restaurant – Franchised
- Average Net Sales 2024 Fiscal Year: $1,152,013
- Number of Restaurants: 153
- % Attaining or Exceeding Average: 62 or 41%
- Median Net Sales 2024 Fiscal Year: $1,035,707
- Low Net Sales 2024 Fiscal Year: $345,164
- High Net Sales 2024 Fiscal Year: $2,458,827
End Cap Strip-Center & Gas/Convenience Restaurant – Franchised
- Average Net Sales 2024 Fiscal Year: $810,415
- Number of Restaurants: 5
- % Attaining or Exceeding Average: 2 or 40%
- Median Net Sales 2024 Fiscal Year: $753,089
- Low Net Sales 2024 Fiscal Year: $408,390
- High Net Sales 2024 Fiscal Year: $1,449,090
Non-Traditional, Walmart or In-Line Restaurant in High Density Market – Franchised
- Average Net Sales 2024 Fiscal Year: $549,006
- Number of Restaurants: 5
- % Attaining or Exceeding Average: 3 or 60%
- Median Net Sales 2024 Fiscal Year: $631,109
- Low Net Sales 2024 Fiscal Year: $261,668
- High Net Sales 2024 Fiscal Year: $706,496
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 14 franchised Rally’s Restaurants that opened between January 2022 and December 2024 (each, a “New Rally’s Restaurant”).
- Table B does not include the Net Sales for 4 franchised Rally’s Restaurants because they did not have a full 52-week period of operation.
All Franchised
- Average Net Sales During First 52-Week Period of Operations: $1,437,573
- Number of Restaurants: 10
- % Attaining or Exceeding Average: 4 or 40%
- Median Net Sales During First 52-Week Period of Operations: $1,071,501
- Low Net Sales During First 52-Week Period of Operations: $866,332
- 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: $1,437,573
- Number of Restaurants: 10
- % Attaining or Exceeding Average: 4 or 40%
- Median Net Sales During First 52-Week Period of Operations: $1,071,501
- Low Net Sales During First 52-Week Period of Operations: $866,332
- High Net Sales During First 52-Week Period of Operations: $2,392,724
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 2 company-owned New Checkers and Rally’s Restaurants that were open and operating during the entire 2024 Fiscal Year (“New Company Restaurants”).
- The New Company Restaurants opened between January 2022 and December 2024 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: $1,216,207 (100%)
- Food and Paper Costs: $375,275 (31%)
- Labor and Benefit Costs: $361,139 (30%)
- Gross Margin: $479,793 (39%)
- Royalties, Occupancy, and Operating Costs: $325,738 (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 leases the location for their Checkers and Rally’s Restaurant and the average annual rent was $69,601 and the median annual rent was $69,601. Rental amounts can vary significantly due to local market factors.
- “EBITDA” means earnings before interest, taxes, depreciation, and amortization.
Part 4 – Statements of Average Net Sales of Checkers/Rally’s Restaurants Open Less Than 350 Days During the 2024 Fiscal Year
- The table below comprises Net Sales information for the 61 franchised Checkers Restaurants, 5 company-owned Checkers Restaurants, 15 franchised Rally’s Restaurants, and 3 company-owned Rally’s Restaurants that were open and operating for less than 350 days during the 2024 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 2024 Fiscal Year; or (v) opened for business after the start of the 2024 Fiscal Year.
Checkers Restaurants
- Average Net Sales 2024 Fiscal Year: $588,393
- Number of Restaurants: 66
- % Attaining or Exceeding Average: 20 or 30%
- Median Net Sales 2024 Fiscal Year: $388,763
- Low Net Sales 2024 Fiscal Year: $1,374
- High Net Sales 2024 Fiscal Year: $3,737,695
Rally’s Restaurants
- Average Net Sales 2024 Fiscal Year: $576,984
- Number of Restaurants: 18
- % Attaining or Exceeding Average: 6 or 33%
- Median Net Sales 2024 Fiscal Year: $528,065
- Low Net Sales 2024 Fiscal Year: $90
- High Net Sales 2024 Fiscal Year: $1,566,750
- Some outlets have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.
Section VI – Checkers & Rally’s Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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