Franchise Times: How Checkers & Rally's Created a Royalty System That Works

As the franchise industry gets increasingly competitive to land qualified, experienced multi-unit prospects, many brands are rethinking their strategy when it comes to royalty fees in order to modernize and make their brands more attractive.

According to an article in the May issue of Franchise Times, 355 new concepts are projected to join the franchise fray in 2016, "up more than 100 over the number of new concepts five years ago" and brands like Checkers are utilizing the royalty fee structure as a way to improve their brand's offering.

“In years past we had opening incentives to get restaurants open by a certain time of year, but that became a disincentive if you found a site opportunity in March or April—you had to push a lot harder than somebody who already found their site in September of the year before,” Jennifer Durham, Chief Development Officer & SVP of Checkers & Rally's Restaurants, Inc, told Franchise Times. “Now what we’ve done is effectively created a target on a rolling 12-month cycle so it’s not bound by year end.”

The Tampa-based 800+ unit fast food franchise implemented the new royalty structure that provides incentives based on three key milestones, which Durham added incentives franchisees to follow the process and rewards them at each step.

“It’s the toughest I’ve ever seen it in the four and a half years I’ve been leading the development team,” Durham told Franchise Times of the competition. “It’s a real struggle, and the brands that don’t innovate are the brands that will get left behind.”

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