Verified — real FDD extraction
SBA-eligible · directory code S1398 since 2017
CHECKERS RESTAURANT OR RALLY'S RESTAURANT
Food & Dining · independent · est. —
Checkers and Rally's are sister fast-food chains known for budget-priced burgers, seasoned fries, and milkshakes served from compact buildings with double drive-thru lanes and walk-up windows instead of indoor dining rooms. A franchisee runs a quick-service location, managing cooks and window staff, food prep, and high-volume drive-thru order flow.
CHECKERS RESTAURANT OR RALLY'S RESTAURANT net unit count declined -7.2% from 2021–2023 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & steady
Distress
A real track record with an unremarkable region of the ledger: neither the growth nor the exits stand out, for better or worse. The main concern in the record: the system is shrinking.
Exit rate · latest year
10.3%
vs 8.2% across 146 food & dining systems
Cost to open
$192K–$2.8M
Item 7 total investment range
SBA loan defaults
9.4%
vs 14.8% avg across rated brands
Market density · New York
Dense market
25% denser than the national average
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2021–2023
Survival record
FDD Item 20 · outlet status by year
In fiscal 2023, 60 of 585 franchised outlets left the system — a 10.3% annualized exit rate, vs 8.2% across 146 food & dining systems. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2021 | 2022 | 2023 |
|---|---|---|---|
| Outlets at start | 858 | 846 | 840 |
| Opened | 10 | 39 | 22 |
| Transfers | 66 | 37 | 33 |
| Terminations | 23 | 0 | 0 |
| Non-renewals | 0 | 0 | 0 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 2 | 29 | 60 |
| Outlets at end | 846 | 840 | 785 |
| Net change | -12 | -6 | -55 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 109 SBA-backed loans to CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchisees since 2013. Of the 53 that have resolved, 9.4% were charged off (defaulted) rather than paid in full, versus 14.8% across 570 rated brands.
9.4%
5 of 53 resolved defaulted
64.0%
avg. charged-off $ ÷ approved $
6.0%
default rate × loss severity
$1,066,209
what recent franchisees borrowed
83 mo
approval → charge-off, defaulted loans
20 vs 28
distinct banks still lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO CHECKERS RESTAURANT OR RALLY'S RESTAURANT BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
Who finances it
the Huntington National Bank
11.3% of this brand's loans
That lender charges off 10.0% of its loans to other franchise brands, vs 14.8% nationally.
Who buys it
61.0%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
Does experience help here?
+29.4pp
multi-unit vs single-unit owners
Owners of multiple units default at 29.4%; single-unit owners at 0.0%.
Computed from 109 SBA 7(a)/504 loans to CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $30K franchise fee (Item 5) and a total investment of $192K–$2.8M (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$192K–$2.8M
all-in investment range
Franchise fee (Item 5)
$30K
upfront, one-time
Royalty (Item 6)
4%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$40K
4% of sales, before profit
Over a 10-yr term
$400K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for CHECKERS RESTAURANT OR RALLY'S RESTAURANT with an independent CPAModeled risk
FDD Risk Score · modeled from the public record
Modeled from the public record, this brand looks safer than 73% of systems we score.
Risk percentile
27 / 100
Loan-corroborated
Modeled SBA charge-off
9.6%
Observed SBA charge-off
9.4%
Top drivers: Investment ceiling (log) (lowers) · System size (log units) (lowers) · Share financed by high-loss lenders (lowers) · Single-lender dependence (raises). 15+ resolved loans stand behind this estimate. A linear scorecard built from this brand's own disclosure figures plus the federal loan record behind its franchisees; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
No recent closures, bankruptcies, or major lawsuits found in the news for CHECKERS RESTAURANT OR RALLY'S RESTAURANT. That's a good sign — but it reflects news coverage, not a guarantee.
11 questions to ask a CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These are the questions built from what CHECKERS RESTAURANT OR RALLY'S RESTAURANT has actually disclosed — each one carries the number it came from, so you can tell whether the answer squares with the record.
- 01
CHECKERS RESTAURANT OR RALLY'S RESTAURANT’s own Item 20 shows 60 of 585 franchised outlets left the system in fiscal 2023 — about 10.3%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2023
- 02
33 units transferred to new owners in fiscal 2023. When you look at those, were they people cashing out a good business — or getting out of a bad one?
Transfers count as neutral in every ranking. They are the single easiest place to hide distress.
FDD Item 20 · FY2023
- 03
The system went from 846 units to 785 over 3 disclosed years. What's the explanation you've been given, and do you believe it?
A shrinking system means fewer owners funding the ad fund and support staff you're paying for.
FDD Item 20 · FY2021–FY2023
- 04
Of 53 SBA loans to CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchisees that have finished, 9.4% were charged off — the borrower didn't repay. Did you finance with an SBA loan, and how close did your first two years come to trouble?
This is the lender's view of failure, from public federal records, and it is independent of anything the franchisor discloses.
SBA 7(a)/504 loan record, FY1991–present
- 05
Item 7 says the low end to open is $192K, but the average recent SBA loan to a CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchisee was $1.1M. What did you actually spend to open, all in?
Lenders size loans to real project costs. A large gap between the disclosed floor and what banks actually fund is the most common way buyers get underfunded.
FDD Item 7 vs SBA approvals FY2020+
- 06
You pay 4.0% royalty on gross sales, plus the ad fund, before any of your own costs. On your actual revenue last year, what did you take home as the owner — not revenue, take-home?
Royalty is charged on sales, not profit. This is the number the brochure never shows and the one your life actually runs on.
FDD Item 6
- 07
CHECKERS RESTAURANT OR RALLY'S RESTAURANT makes an earnings claim in Item 19. Does your unit look like that number — and do you know which units they included to build it?
Item 19 is legal to build from a flattering subset. Ask whether they excluded new units, closed units, or company stores.
FDD Item 19 · 2024
- 08
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 09
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 10
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 11
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
I'll email you the printable version, and tell you if CHECKERS RESTAURANT OR RALLY'S RESTAURANT’s numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.
A broker is paid by the franchisor to place you. I'm paid by you — and the job is pressure-testing CHECKERS RESTAURANT OR RALLY'S RESTAURANT's numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchise questions, answered from the filings
What percentage of CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchises closed last year?
In CHECKERS RESTAURANT OR RALLY'S RESTAURANT's latest FDD Item 20 (fiscal 2023), 60 of 585 franchised outlets left the system — an annualized exit rate of 10.3% — compared with 8.2% across 146 food & dining systems tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchise cost?
Per CHECKERS RESTAURANT OR RALLY'S RESTAURANT's 2024 FDD, buying in requires an initial franchise fee of $30K (Item 5) and a total initial investment of $192K–$2.8M (Item 7).
What royalty does CHECKERS RESTAURANT OR RALLY'S RESTAURANT charge?
CHECKERS RESTAURANT OR RALLY'S RESTAURANT charges an ongoing royalty of 4.0% of gross sales, per Item 6 of its 2024 FDD.
Does CHECKERS RESTAURANT OR RALLY'S RESTAURANT disclose earnings (Item 19)?
Yes — CHECKERS RESTAURANT OR RALLY'S RESTAURANT makes a financial performance representation in Item 19 of its 2024 FDD. Read it closely: franchisors choose which units and which metrics to include.
How often do SBA loans for CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchises default?
Across 109 SBA-backed loans to CHECKERS RESTAURANT OR RALLY'S RESTAURANT franchisees since 2013, 5 of the 53 that have resolved were charged off — a 9.4% default rate, versus about 14.8% across all rated franchise brands. This is the lender's-eye view of franchisee failure, drawn from public SBA 7(a)/504 FOIA data and independent of the franchisor's own disclosures.