Next up: a robust redesign, inside and out.
Checkers and Rally’s
2021 Unit Agreements: 86
Total New Sites in Pipeline: 105
New Agreements Signed by Current Franchisees: 50%

Checkers & Rally’s had its best year ever in 2021, thanks in part to robust off-premises channels the iconic brands have been building upon for years. By the end of 2021, the brands had 86 new franchise commitments, with over 100 new locations in the pipeline for 2022.

The brands, best known for their craveable fries, delicious charbroiled burgers, and being pioneers of the double drive thru, see their success as a product of both the dynamic, indulgent menu, as well as the surge in demand for off-premises dining.

“COVID taught us that drive thrus are more flexible in certain situations—like a pandemic,” says Robert Bhagwandat, senior director of franchise development at Checkers. “We’ve always been drive-thru and walk-up only, so we had a huge head start on the competition. While everyone else was scrambling to figure out their formats, we were already set up for this, which is a big deal to franchisees considering the current labor shortage.”

The brands’ small footprint has been a central part of their operational model for decades. Very few locations have dining rooms, which allowed Checkers & Rally’s to perfect drive-thru service long before COVID. Now, as other brands try to figure out how to add drive-thru lanes or pick-up windows with limited real estate, Checkers & Rally’s are now focusing on how to improve operations in other areas—like its “Restaurant of the Future” (rotf) concept.

As part of a $20 million capital infusion from New York-based private equity firm Oak Hill Capital Partners (which acquired the brands in 2017), Checkers and Rally’s conducted a time-and-motion study to facilitate a more modern and efficient redesign of its stores. As a result, kitchens were redesigned to save as much as 1.5 miles of walking during a line shift. Franchisees got a peek at the first ROTF prototype in Lakeland, Florida, last June.

“The new exterior is a game changer,” Bhagwandat says. “We still have elements of our signature checkerboard tiles, but toned down so the restaurant image is brought forward. It’s eye-appealing and innovative, and the modular design allows franchisees to add on if they need to, but still have the iconic double drive thru.”

ROTF stores have a dedicated ecommerce window for third-party delivery drivers and customers who order through their app, which launched in January 2021.

The brands recently expanded into new territory including Rhode Island and Sacramento, California, and are seeking to partner with experienced restaurant operators who have knowledge of local real estate markets. Average development time for a new location is between six and 12 months, and initial franchise fees run between $20,000–30,000. Potential franchisees must show a $750,000 minimum net worth, of which $250,000 per location must be liquid. But, Bhagwandat says, franchising is not solely about the financial aspect.

“At the end of day, you must love and believe in what we’re doing,” Bhagwandat says. “Sit-down dining will never be at pre-COVID levels again, and existing franchisees see that it makes sense to invest more now. For new franchisees, there’s no better time to make this happen.”

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