The recent health crisis has demonstrated how at-risk some restaurant concepts are to shutdowns. It has also proven the importance of a drive-thru service for a restaurant that provides both convenience and safety for customers.
Franchising a fast food chain is one business to consider and an ideal candidate would be Checkers & Rally’s. The concepts fits the requirements mentioned above with each store set up as a drive-thru so customers and employees aren’t exposed to each other for long periods of time. Checkers & Rally’s can also save you leasing spaces since it doesn’t require dining area. Additionally, this means there’s no dining area to clean up and serve, reducing staff headcount. Checkers and Rally’s has also been around for more than 30 years and continues to open more branches to this day.
How much does it cost to open a Checkers and Rally’s?
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We’re pleased to inform you that Checkers and Rally’s are open for franchising! This fast food chain requires a minimum liquid asset of $250,000 and a minimum net worth of $750,000. Initial investment is ranges from $165,000 to $1,235,400 with a franchise fee of $30,000.
My guide doesn’t stop here. Below are more guidelines, facts, and financial details I’d want to know before opening a Checkers or Rally’s franchise.
Financial Requirements and Fees
Here are Checkers & Rally’s financial requirements and fees to franchise a store:
|Fees / Expenses||Financial Amount|
|Net Worth||$750,000 (minimum)|
|Total Investment||$165,000 – $1,235,400|
Aside from these fees, Checkers & Rally’s requires ongoing royalty and advertising fees. Their royalty fees are 4% and their total advertising expenditure requirement is 4.5%. Both are based on a store’s net sales. Make sure you’re comfortable sending 8.5% of the restaurants net sales to corporate each month before getting started.
Once you decide to franchise a Checkers & Rally’s and submit your application, they’ll review your forms and financial details. You’ll also be interviewed by a franchise business consultant before your application to operate one of their stores is approved.
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Average Sales / Revenue per Year
Checkers & Rally’s total sales in 2020 were $546 million, an improvement by 0.5% from their previous year’s sales which was at $535 million.
Though the percentage is small, Checkers & Rally’s doesn’t seem to be backing down. They’re continuing to expand and even change their store’s designs. The company says food quality has improved too. Checkers and Rally’s also also released mobile app and rewards system in an effort to bolster repeat customers. This year, the company also claimed their delivery sales doubled.
With the many upgrades Checkers & Rally’s is doing inside their stores, technology, and menu, it’s not hard to imagine sales continuing to grow the next 5 years.
Checkers & Rally’s Franchise Facts
|Incorporated Name||Checkers Drive-In Restaurants, Inc.|
|Industry||Quick Service Restaurant|
|Subsector||Hamburgers / Drive-Thru|
Checkers Drive-In Restaurants opened in 1986 in Mobile, Alabama while Rally’s opened in 1985 at Louisville, Kentucky. Both were known to be strong competitors of the other before they finally teaming up. The restaurants merged in 1999 in what is known today as Checkers & Rally’s.
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Both fast food chains had the same concept so it was easy to bring the two restaurant under one roof. Both have a drive-through setup and offer the same menu items. After the merge, both their logos and signage looked almost similar as well. Though in some places, the name Checkers is more dominantly seen. Both restaurants have the same suppliers and corporate management to ensure consistency.
As of December 28, 2020, there are a total of 847 Checkers & Rally’s branches. For Checkers, there are 134 corporate owned units and 421 franchised units. For Rally’s, there are 130 corporate owned units and 162 franchised units.
Items on the menu include burgers, chicken burgers, fish burgers, hotdogs, wings, fries, milkshakes, and slushies. They also offer a family bundles for larger groups.
One might consider Checkers & Rally’s to serve ordinary fast food. But this chain gathers a following because they’re considered to be affordable, which is why they’re a classic hit in the United States. They still offer their cheeseburgers at just $1. Other items they offer that are only for a dollar are their grilled hotdogs and B.L.T.
The business has won numerous awards through the years. They’ve won Best Franchise Deal in 2016, 2017, and 2018. They’re also known as the Number 1 Most Craveable Fries in 2021 by Restaurant Business. Entrepreneur’s Franchise 500 lists them regularly.
Checkers & Rally’s may be known for their double drive-through concept but they’re constantly looking for ways to adapt and change. They now have an e-commerce lane for easy ordering and pick-up.
Checkers & Rally’s franchise agreement term is 20 years. According to their website, it takes 6 to 12 months to develop a location and that’s depending on the construction, permits, and site-type chosen for that area.
At present, Checkers & Rally’s is headed by Chief Executive Officer Frances Allen and is headquartered in Tampa, Florida. The company continues to be focused on growing their Checkers and Rally’s to 1,000 chains.
How Much Does Checkers & Rally’s Make in Profit?
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It is not known officially how much does Checkers & Rally’s make in profit. Some experts estimate the franchise owners receive $84,000 – $110,000 annually after expenses. This estimate falls in line with similar franchise concepts.
Advantages of a Checkers & Rally’s Franchise
What can you expect when you own a Checkers & Rally’s franchise? What will greet you when you start operating this fast food chain? Here we have a list of advantages that you can look forward to.
Let’s face it: it’s going to take a while before things get back to normal. The pandemic has left us all scarred a little that the thought of going out to dine is a bit nerve-wracking. But Checkers & Rally’s are providing customers with safe spaces to order food. With their upgrades to e-commerce lanes, you can offer a contactless experience for customers who are still a bit wary to interact with people and would like to order their food in a safe way.
Checkers & Rally’s are going through a major upgrade. They’re making the entire chain look modernized which is not only aesthetically pleasing but it also has all these new functions that are needed in this day and age. They’re rolling out new burger flavors. They also have membership programs that offer rewards. If your application to become a franchise operator gets accepted, you might be just in time to experience this brand new Checkers & Rally’s too.
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Checkers & Rally’s are known for their double drive-through concept. There is a chance your sales can increase because your store is accommodating more cars driving by your location.
In case you didn’t know, drive-thru sales are critical for most fast-food chains. Some reports say drive-thru sales represent 70% of some stores gross sales. By adding a second drive-thru window, there’s the opportunity to increase output beyond what’s currently available.
Once you get accepted to become a franchise operator, Checkers & Rally’s will be with you throughout the whole setup. They’ll give you 4 weeks of restaurant training and discuss with you and develop the marketing plans for the business. If you have any concerns, they’ll be there to help you with them.
If you don’t offer dine-in service, you don’t need to hire as much staff. Even if you don’t deliver food the the table, there’s still work involved in keeping a dining room clean and appealing. You also need to consider staff will need to be ready to accept orders inside the store and through the drive-thru. Don’t forget about cleaning the bathrooms, taking out the garbage, and restocking the soda machine for customers too. In the tight labor market that restaurant owners are facing today, it’s can be an advantage to operate with no in-store dining.
Challenges of a Checkers & Rally’s Franchise
It’s a fact that running a business will always bring some challenges. It’s only normal. The best thing you can do about this is to prepare for them so they don’t take you by surprise. It’s what makes a good entrepreneur.
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Here are some challenges that you could encounter when you enroll as a franchisee with Checkers or Rally’s.
Checkers & Rally’s have the basics when it comes down to looking for some fast food. You have the burgers and hotdogs and fries. You have the slushies and the sundaes. But that’s about it. If you have customers looking for healthy options such as a salad or a vegan option, they won’t be able to find it here.
Let’s be honest: even you’re confused whether it really is a Checkers place or a Rally’s place. The packaging has both the names and logos so it’s honestly confusing. They also have two websites that look identical. If it’s confusing for you, how much more for your customers?
Checkers & Rally’s competitors are big and well funded. There’s McDonald’s, Wendy’s, and Burger King to name a few. We understand you may only be a franchise operator so you’d have to rely on the company to constantly think of ways to attract customers that can set you apart from your big name competitors.
No Dine In
As mentioned earlier, no in-store dining service can be an advantages. But there are also downsides. We get that the drive-through is one of the main concepts of Checkers & Rally’s. But a certain percentage of people would prefer to eat at the location instead of in their cars or at home. Though Checkers & Rally’s offer al fresco dining, it would still be nice to have an option to eat indoors in an air-conditioned setting.
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Is the Checkers & Rally’s Franchise Right For You?
If you’re looking for a no-frills fast food chain, Checkers & Rally’s might be for you. And with all the investment and upgrades they’re doing recently, you can expect to see some cool designs for your branch and a modernized feel to it as well. Just remember that the franchise agreement term is 20 years so be prepared you’ll want to be ready to stick with this franchise for the long haul.
What is an alternative Checkers & Rally’s franchise?
Any fast food place that offers burgers and fries is a great alternative to Checkers & Rally’s provided they’re doing well on the market. It also has to have an initial franchise fee that’s not too expensive.
To give you a few options, you can check out McDonald’s or Carl’s Jr. These two chains have big names and are known throughout the United States and even internationally. They sell the same items you get at Checkers & Rally’s with even more options. They also have a drive-through and dine-in setup.
McDonald’s has an initial franchise fee of $45,000 while Carl’s Jr. has a franchise fee of $25,000 to $35,000.
Are you ready to operate a Checkers & Rally’s franchise? I hope this guide has helped give you a clear analysis of the pros and cons of this long-standing fast food chain.