Checkers / Rally’s Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Checkers and Rally's is a quick-service franchise built on double drive-thru burger stands known for seasoned fries and value pricing. Franchisees run compact, drive-thru-only restaurants focused on speed and food-cost control.
FranchiseVerdict summary · 2026
A Checkers / Rally’s franchise requires a total initial investment of $124K – $2.1M, including a $30K franchise fee and an ongoing 4.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.1M[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $124K – $2.1M
- 9th pct Service Resta…
- Avg gross sales
- $1.1M
- Net sales21st pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 761
- 91st pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $124K – $2.1M including a $30K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.1M/year (median $1.1M), with an estimated 23% cash-on-cash return (based on GROSS MARGIN (3)). Note: this is gross profit, not take-home income.
- RISKVerdict B (Above average), verdict score 56/100 (higher is better).
- DECLINESystem contracting at -9.7% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Checkers Drive-In Restaurants, Inc.
- Parent company
- Checkers Holdings, Inc.
- Ultimate parent
- Checkers Topco, LLC
- Predecessor
- Rally's Hamburgers, Inc.
- Prior franchisor entity
- CEO title
- Chief Executive Officer and President
- Chris Tebben
- Incorporated in
- DE
- HQ
- 4300 West Cypress Street, Suite 600, Tampa, Florida 33607
- Auditor
- Grant Thornton LLP
- Audited financials
- Franchisor revenue
- $300.4M
- vs $315K prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
- CEO
- Chris Tebben
- Headquarters
- FL
- Founded
- 1991
- FDD year
- 2025
- States available
- 29
Can you afford it, and what does the money buy?
Entry cost runs 70% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown28 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee (Modular Design Drive-Thru) | $20K | $30K | |
| Initial Advertising Deposit (Modular Design Drive-Thru) | $15K | $15K | |
| Asset Transfer Fee (Modular Design Drive-Thru) | $0 | $10K | |
| Restaurant Building Costs (Modular Design Drive-Thru) | $355K | $1.3M | |
| Restaurant Equipment & Technology (Modular Design Drive-Thru) | $42K | $330K | |
| Soft Costs (Modular Design Drive-Thru) | $17K | $226K | |
| Signage including Menuboards (Modular Design Drive-Thru) | $12K | $98K | |
| Inventory (Modular Design Drive-Thru) | $4K | $12K | |
| Additional Funds - 3 Months (Modular Design Drive-Thru) | $50K | $120K | |
| Initial Franchise Fee (Conversion Restaurant) | $20K | $30K | |
| Initial Advertising Deposit (Conversion Restaurant) | $15K | $15K | |
| Asset Transfer Fee (Conversion Restaurant) | $0 | $10K | |
| Restaurant Building (Conversion Restaurant) | $322K | $739K | |
| Restaurant Equipment & Technology (Conversion Restaurant) | $193K | $330K | |
| Soft Costs (Conversion Restaurant) | $50K | $90K | |
| Signage including Menuboards (Conversion Restaurant) | $29K | $134K | |
| Inventory (Conversion Restaurant) | $4K | $12K | |
| Additional Funds - 3 Months (Conversion Restaurant) | $50K | $120K | |
| Initial Franchise Fee (Site Built Restaurant) | $20K | $30K | |
| Initial Advertising Deposit (Site Built Restaurant) | $15K | $15K | |
| Total initial investment | $2.3M | $5.5M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $124K – $2.1M
- Top 40% of category vs category
- Liquid capital req'd
- $50K – $120K
- Bottom third — review vs category
- Franchise fee
- $30K – $30K
- Top 40% of category vs category
- Royalty
- 4.0%
- typical 6–8%
- Ad fund
- 2.6%
- typical 3–5%
- Total fee load
- 6.7%
- vs 9–13% typical
- Payback period
- 4.3 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of net sales |
| Marketing / ad fund | 2.6% of net sales |
| Technology fee | $190 |
| Training fee | $1K |
| Transfer fee | $20K |
| Renewal fee | $15K |
| Inventory (initial) | $4K – $12K |
| Total fee load | 6.7% of rev |
A 6.7% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales land near the quick-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Checkers / Rally’s until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$1.2M
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
FDD-reported earnings
The FDD reports $480K as GROSS MARGIN (3). This is a disclosed figure, not our estimate — we publish no modelled profit for Checkers / Rally’s.
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Checkers / Rally’s unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
Reported as net sales, not gross sales
- Avg gross sales
- $1.1M
- Per unit, per year
- Median gross sales
- $1.1M
- Avg gross margin (3)
- $480K
- Reported as GROSS MARGIN (3) in FDD Item 19
- Cash-on-cash
- 23.4%
- Based on GROSS MARGIN (3) / investment midpoint
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- net sales
- Sample size
- 335 outlets
- vs category median 18 · large
- Range (low → high)
- $216K→$3.0M
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 9 / 10
- vs category median 4 / 10 · above
Compared against 782 Quick-Service Restaurants brands
Revenue is only 1.0x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.1M/year in gross sales. Revenue-to-investment ratio: 1.0x.
Fee burden
Total ongoing fee load of 6.7% — below the Quick-Service Restaurants average of 7.9%.
Disclosure
Transparency score 9/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -9.7% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Multi-unit rate
Only 21% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants averages
How Checkers / Rally’s Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 761
- Opened
- 23
- Last reporting year
- Closed
- 43
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 24.6%
- Company-owned
- 229
- Corporate units in the system
- % franchised
- 70%
- vs corporate-owned
- Multi-unit owners
- 21.4%
- Net growth (3-yr)
- -9.7%
- Net unit change over 3 years
- 3-yr CAGR
- -9.7%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 84
- Closed (3yr)
- 131
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 73
- Reacquired (3yr)
- 0
- Franchisor bought back
- Transfer rate
- 2.2%
- Owners selling to other franchisees
- Continuity rate
- 91.2%
- Units that stayed open
- Ceased ops
- 8.5%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 29 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Available to sell in · Item 12
- Illinois
- Indiana
- Michigan
- Minnesota
- New York
- Rhode Island
- Virginia
- Wisconsin
States where the franchisor is registered to sell new franchises (FDD registration filings).
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 94
- Loan volume
- $16.2M
- Median loan
- $619K
- 50th percentile
- Charge-off rate
- N/A
- no resolved loans yet — rate needs a terminal outcome
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 0
- Defaults
- 0
- Typical loan rate
- N/A
- Franchised industry avg
- 10.8%
- n=12,827 loans
- Jobs supported
- 955
- 5.9 per loan
- Lender concentration
- N/A
Borrower mix: 40% went to startups / new businesses, 60% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 10.8% vs 10.0% for independents — franchising is associated with 8% higher SBA default risk in this category.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Checkers / Rally’s's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 8 states
- Startup risk premium and job creation velocity
- 9-year lending trend
Instant access. No subscription.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Checkers/Rally's presents elevated risk due to contracting unit count, material litigation disputes, thin profit margins, and lack of transparent financial disclosure—unsuitable for risk-averse investors despite protected territory.
Litigation (Item 3)
1 pending matter: Baby Buford (former franchisees' wrongful termination/advertising misappropriation arbitration). 1 concluded matter: Cotter/Dinh consolidated data breach class action settled with vouchers/reimbursements. 1 franchisor-initiated matter: Southern Shoals cross-claim for indemnification against franchisee in loan default case.
Largest disclosed settlement: $299,999
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Grant Thornton LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Audited consolidated total revenues for the fiscal year ended December 30, 2024 (Successor) were $300,381K (Restaurant sales $255,474K; Franchise and retail royalty revenue $35,389K; Franchise fees and other income $9,518K). Prior comparative is split into a Successor period (June 17, 2023-Jan 1, 2024: $165,142K) and a Predecessor period (Jan 3-June 16, 2023: $149,637K) due to the June 2023 out-of-court restructuring/pushdown accounting, so no single comparable full prior-year figure exists; yr2 left null.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 56 / 100 verdict
- 01MINORUnit count declining 3.6% YoY (761 units) signals system contraction and potential market saturation
- 02HIGHMultiple active litigation matters including wrongful termination claims, data breach settlement, and franchisor indemnification disputes indicate operational and legal instability
- 03MEDNet income of $154,055 on $1.1M revenue (14% margin) is thin for QSR with 4% royalty obligation, leaving limited buffer for underperformers
- 04MINORHigh investment ceiling ($2.1M+) combined with declining unit count creates elevated risk of poor ROI and difficulty exiting
- 05HIGHProtected territory insufficient offset given brand momentum is negative and litigation suggests franchisor-franchisee relationship strain
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 6.7% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Territory population | 20,000 |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 3 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Florida |
| Jury trial waiver | No |
| Governing law | FL |
| Litigation count | 3 |
View Item 3 litigation summary
1 pending matter: Baby Buford (former franchisees' wrongful termination/advertising misappropriation arbitration). 1 concluded matter: Cotter/Dinh consolidated data breach class action settled with vouchers/reimbursements. 1 franchisor-initiated matter: Southern Shoals cross-claim for indemnification against franchisee in loan default case.
Items 10, 11
Training & Operations
- Classroom training
- 28 hrs
- On-the-job training
- 132 hrs
- Training location
- Tampa, FL or other designated location
- Ongoing training
- Required
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Aloha POS (version 19 or higher) with Xenial restaurant management system
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Aloha POS (version 19 or higher) with Xenial restaurant management system
Item 20 · call current owners
Franchisee Contacts
595 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Checkers / Rally’s · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Checkers / Rally’s franchise?
The total investment to open a Checkers / Rally’s franchise ranges from $124K – $2.1M, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Checkers / Rally’s franchise owners earn?
According to Item 19 of the Checkers / Rally’s FDD, the average gross sales per unit is $1.1M. The median is $1.1M. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Checkers / Rally’s FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Checkers / Rally’s FDD and qualifies whose outlets they describe.
What is Checkers / Rally’s's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Checkers / Rally’s (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Checkers / Rally’s franchise locations are there?
As of their most recent FDD filing, Checkers / Rally’s has 761 total units in the United States, including 532 franchised units and 229 company-owned units. 23 new units were opened in the latest reporting year.
Is Checkers / Rally’s a good franchise to buy?
FranchiseVerdict rates Checkers / Rally’s as a B-grade franchise with a verdict score of 56 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.