Checkers/Rally's

The transfer fee of $20,000 is above typical ranges for this franchise category. How is this fee justified, and are there circumstances under which it might be reduced or waived?

Your 3-year turnover rate of 18.7% significantly exceeds the typical 0.9-15.5% range. Can you provide specific reasons why 131 units closed or transferred during this period, and what changes are being implemented to improve unit retention?

The System Health score of 42 is below the typical 50.0-75.0 range. What specific metrics or operational indicators drive this score, and what is the franchisor doing to address the underlying concerns?

The system contracted 26 units in the most recent year with a 5.5% exit rate. Are there geographic clusters of closures, or are closures distributed across all markets? Are certain market types or unit sizes more affected?

You initiated 2 litigation cases as plaintiff in the past 3 years, exceeding the typical 0.0-1.0 range. What were the nature of these cases, and what was the outcome? Are there unresolved disputes with franchisees?

The initial contract term of 20 years exceeds the typical 10.0-15.0 range for this category. What is the rationale for this extended term, and how does it compare to competing franchise systems?

Your non-compete radius of 3 miles is below the typical 5.0-10.0 range. Given the 18.7% turnover rate, how does this limited non-compete protection affect your ability to prevent former franchisees from competing in the same areas?

The royalty rate of 4.0% is below the typical 5.0-6.0% range. How does this lower royalty rate impact franchisor support, marketing contributions, and ongoing system investments compared to competitors?

With 6 renewal conditions versus the typical 7.0-9.0 range, what conditions must be met for renewal after the initial 20-year term? Are there capital expenditure, remodeling, or other requirements?

Of the 131 unit exits over 3 years, how many were attributed to profitability issues, franchisee financial difficulties, operational challenges, or other specific factors?

The 1-year net unit growth is -3.3%, with unit count declining from 787 to 761. How does the franchisor plan to stabilize or reverse this contraction over the next 2-3 years?

Median gross sales are approximately $1.05 million. What is the typical profit margin or EBITDA range for franchisees at this sales level, and how many units are operating below the median?

The dispute resolution clause requires binding individual arbitration with class action prohibitions. Have any franchisees challenged this clause, or has the pending litigation case involve disputes over arbitration provisions?

The termination clause permits franchisor termination for health/sanitation violations with only a 24-hour cure period. How many times in the past 3 years has the franchisor exercised this right, and what documentation supports these terminations?

You require use of only approved suppliers across 5 categories (food, beverages, ingredients, uniforms, packaging). Does the franchisor or any affiliated entity manufacture or distribute these products? Are there exclusive supply agreements that benefit the franchisor financially?

The personal guarantee clause makes owners jointly and severally liable for all agreement obligations. Are there any limitations or carve-outs to this guarantee, such as for events beyond the franchisee's control?

Given the 1 pending litigation case, what is the nature of this dispute, which party initiated it, what is the requested relief, and what is the expected resolution timeline?

The technology fee is a fixed $190 per unit. What specific technology services, systems, and support does this fee cover, and how has this fee evolved over the past 5 years?

With encroachment protection in place, how does the franchisor define and enforce exclusivity to prevent company-owned or franchised unit cannibalization in franchisee territories?

The 2023 closure spike (59 units) was followed by moderation in 2024 (43 units). Do you anticipate continued closures, stabilization, or potential growth in 2025 and beyond?