Checkers/Rally's
Bottom line
- Total investment $124K – $2.1M including a $30K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $1.1M/year (median $1.1M). Estimated payback in 2.4 years.
- Rated STRONG with a risk score of 47/100. SBA loan default rate of 0.0% across 94 loans (below the industry average).
- System contracting at -7.6% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Checkers/Rally's unit return on the cash you put in?
Unlevered ROIC · per unit
13%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Checkers/Rally's units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.4M
on $7.1M purchase
Total debt
$5.7M
SBA $3.6M + senior + seller note
Overview
About
Franchisees operate double drive-thru fast-casual burger restaurants focusing on quick service, high-volume transactions, and limited menu items (burgers, hot dogs, fries). Day-to-day operations involve managing 24-hour shifts, staffing lean crews, maintaining drive-thru efficiency, inventory control, and compliance with brand standards while remitting 4% royalties and contributing to advertising funds.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 7 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Checkers/Rally's presents caution-level risk due to contracting unit count, active litigation, opaque financials, and questions about franchisor governance of franchisee contributions.
Score breakdown · what drove the 47 / 100 rating
- 01MINORSystem contracting at -3.6% YoY with 761 units indicates declining franchise viability and potential saturation or performance issues
- 02HIGHMultiple active litigation cases including wrongful termination arbitration and data breach settlement suggest operational/legal risk and franchisee relationship problems
- 03MINORWide investment range ($123K-$2.1M) and lack of Item 19 financial disclosure creates opacity around actual unit economics and profitability variability
- 04MINORNet income of $479K on $1.1M revenue (43.6% margin) is exceptionally high and may not be representative or sustainable across all unit types
- 05MINORPending arbitration by Baby Buford, LLC over advertising fund misappropriation raises concerns about franchisor fund management and franchisee grievance handling
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Checkers/Rally's · FDD (2025) PDF