About Rally's Restaurants Franchise
Rally's Restaurants is a quick-service restaurant (QSR) franchise offering a limited menu of hamburgers, cheeseburgers, hot dogs, and other menu items.
Franchisees operate drive-thru restaurants designed around a distinctive 1950s diner and art deco motif, serving made-to-order food at exceptional value.
The menu includes burgers, sandwiches, signature Famous Seasoned Fries, bone-in chicken wings, dessert offerings including layered sundaes, milkshakes, and ice cream cones (Cold Creations), targeting value-conscious consumers seeking bold, flavorful fast food.
Rally's Restaurants Franchise Cost & Fees
Minimum Investment
$169K
Average Investment
$1.3M
Maximum Investment
$2.4M
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $30,000 | One-time payment upon signing |
| Royalty Fee | 4% of Net Sales of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 4.5% of Net Sales (advertising expenditure requirement) | National brand fund |
| Total Investment Range | $169,052 – $2,368,316 | Includes build-out, inventory, working capital |
The investment range of $169K–$2.4M reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (4% of Net Sales) and marketing fee (4.5% of Net Sales (advertising expenditure requirement)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee | $15,000 | $30,000 |
| Initial Advertising Deposit | $10,000 | $10,000 |
| Restaurant Building Costs (New Modular) | $370,000 | $1,219,243 |
| Restaurant Building Shipping Costs (New Modular) | $8,400 | $49,660 |
| Restaurant Equipment & Technology (New Modular) | $177,733 | $226,010 |
| Soft Costs (New Modular) | $889 | $41,380 |
| Site Development Costs (New Modular) | $150,000 | $641,000 |
| Signage including Menuboards (New Modular) | $12,775 | $56,023 |
| Inventory | $1,000 | $5,000 |
| Additional Funds - 3 Months | $40,000 | $90,000 |
| TOTAL New Modular Design Single Drive-Thru | $790,797 | $2,368,316 |
| Initial Franchise Fee (Site Built/Conversion) | $20,000 | $30,000 |
| Initial Advertising Deposit (Site Built/Conversion) | $10,000 | $10,000 |
| Restaurant Building Costs (Site Built/Conversion) | $164,280 | $658,000 |
| Restaurant Equipment & Technology (Site Built/Conversion) | $86,149 | $228,407 |
| Soft Costs (Site Built/Conversion) | $7,500 | $56,800 |
| Signage including Menuboards (Site Built/Conversion) | $22,700 | $52,704 |
| Inventory (Site Built/Conversion) | $1,000 | $5,000 |
| Additional Funds - 3 Months (Site Built/Conversion) | $40,000 | $90,000 |
| TOTAL Site Built or Conversion | $351,629 | $1,130,911 |
| Initial Franchise Fee (Endcap Strip-Center) | $20,000 | $30,000 |
| Initial Advertising Deposit (Endcap Strip-Center) | $10,000 | $10,000 |
| Restaurant Building Costs (Endcap Strip-Center) | $85,000 | $385,827 |
| Restaurant Equipment & Technology (Endcap Strip-Center) | $141,000 | $286,111 |
| Soft Costs (Endcap Strip-Center) | $0 | $2,500 |
| Signage including Menuboards (Endcap Strip-Center) | $8,000 | $25,000 |
| Inventory (Endcap Strip-Center) | $1,000 | $5,000 |
| Additional Funds - 3 Months (Endcap Strip-Center) | $40,000 | $90,000 |
| TOTAL Endcap Strip-Center | $305,000 | $834,438 |
| Initial Franchise Fee (Non-Traditional/Walmart/In-Line) | $15,000 | $15,000 |
| Initial Advertising Deposit (Non-Traditional/Walmart/In-Line) | $10,000 | $10,000 |
| Restaurant Building Costs (Non-Traditional/Walmart/In-Line) | $66,157 | $369,405 |
| Restaurant Equipment & Technology (Non-Traditional/Walmart/In-Line) | $32,095 | $197,058 |
| Soft Costs (Non-Traditional/Walmart/In-Line) | $1,800 | $66,156 |
| Signage including Menuboards (Non-Traditional/Walmart/In-Line) | $3,000 | $13,925 |
| Inventory (Non-Traditional/Walmart/In-Line) | $1,000 | $5,000 |
| Additional Funds - 3 Months (Non-Traditional/Walmart/In-Line) | $40,000 | $90,000 |
| TOTAL Non-Traditional/Walmart/In-Line | $169,052 | $766,544 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $20,000 single restaurant ($10,000 if existing franchisee); $20,000 + $5,000 per additional for multiple restaurants |
| Renewal Fee | Up to 50% of then-current standard initial franchise fee |
| Technology Fee | $190 - $370 per quarter |
| Audit Fee | Cost of audit |
| National Production Fund Contributions | Up to 3% of Net Sales |
| Cooperative Advertising | Determined by local or regional advertising cooperative |
| Delivery Administration Fee | 2% of total delivery price |
| Order Ahead Program Administration Fee | 2% of total order ahead price |
| Firewall Fee | $165 - $170 per quarter |
| Aloha Connected Payment | $179 - $185 per quarter |
| Late Payment Fee | $250 |
| Extension Fee | $5,000 |
| Interest on Late Payments | Highest contract rate permitted by law or 4% plus prime rate |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | Approximately 5 weeks total |
| Classroom Training | 28 - 33 hours (approximately 1 week) |
| On-the-Job Training | 132 - 165 hours (approximately 4 weeks) |
| Training Location | Tampa, Florida or other location designated by the franchisor |
| Additional Training | Franchisor may require periodic or additional training programs on an as-needed or as-requested basis at then-current prices |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Protected |
| Exclusive Territory | No |
| Territory Size | Lesser of: (i) 1 mile radius from center of the Premises, or (ii) area immediately surrounding the Premises encompassing a population of 30,000 residents |
| Description | The Franchise Agreement grants the right to own and operate a Restaurant at a specific location. A limited Protected Area is provided where the franchisor will not operate or grant to a third party the right to operate any Checkers or Rally's Restaurant. However, no exclusive territory is granted and the franchisee may face competition from other franchisees, company-owned outlets, or other channels of distribution. No Protected Area is provided for Non-Traditional Site franchisees. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 20 years |
| Renewal Term | 10 years or 20 years |
| Renewal Fee | Up to 50% of then-current standard initial franchise fee (33.33% for 10-year term, 50% for 20-year term) |
| Renewal Conditions | Must be in compliance with all terms of all agreements; sign new agreement which may contain materially different terms and conditions; pay renewal fee; remodel; no adverse franchise legislation; give 180 days prior notice; sign a general release |
| Transfer Fee | $20,000 for single restaurant ($10,000 if transferee is existing franchisee); $20,000 + $5,000 per additional for multiple restaurants |
| Transfer Conditions | Restaurant must have opened; transferee must qualify, complete training, sign existing or new agreement and pay transfer fee; franchisee must guaranty transferee obligations; transferee cannot be public company; must transfer all restaurants; be in compliance with agreements; subordinate debts; sign release and non-compete |
| Termination for Cause | Franchisor can terminate for specified causes including insolvency, failure to open or abandonment of business, cancellation of lease, misrepresentations, conviction of a felony, unauthorized transfer, unauthorized disclosure of confidential information, understatement of Net Sales 3+ times or by more than 5%, and repeated breaches. Curable defaults: 24 hours for health violation, 10 days for failure to pay, 30 days for other breaches. |
| Non-Compete Period | 2 years |
| Non-Compete Details | During the term: no involvement in any competing business regardless of its location. After termination or expiration: no competing business for 2 years at the Premises of the Franchised Restaurant, or within 3 miles of the Franchised Restaurant or any other Checkers or Rally's Restaurant. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | Franchisee or Operating Partner must exert full-time and best efforts to the development and operation of the Franchised Restaurant. The Franchised Restaurant must at all times be managed by the franchisee, Operating Partner, or a manager who has completed the franchisor's training program. The restaurant must be under direct, on-premises supervision at all times. Franchisees may not engage in any other business or activity that requires substantial management responsibility or conflicts with franchise obligations. |
| Required Suppliers | Franchisees must purchase goods, services, supplies, fixtures, equipment and inventory only from suppliers approved by the franchisor. The franchisor and affiliates may be approved suppliers. Currently, the franchisor is not an approved supplier for any items except it may sell used modular restaurants and restaurant equipment. |
| Supply Restrictions | All food products, beverages, ingredients, uniforms, packaging materials, menus, forms, labels, equipment and other supplies must conform to franchisor specifications and quality standards and be purchased from approved suppliers. Franchisees must obtain written approval to use any unapproved supplier. |
| Franchisor Revenue from Suppliers | Total revenues for fiscal year ended January 3, 2022 were $332,024,054, of which $8,297,741 or 2.5% were from required purchases and leases by franchisees. Affiliate CDSI earned $10,797,447 from required franchisee purchases. Affiliate Imagine derived $732,899.90 from required franchisee purchases. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | The franchisor does not offer direct or indirect financing to franchisees and does not guarantee franchisee notes, leases or other obligations. |
Rally's Restaurants Franchise Earnings — Item 19
Average Revenue
$1.1M
Median Revenue
$1.0M
Revenue Range
$234K – $2.7M
Sample Size
372 units
Past financial performance does not guarantee future results. Individual results will vary.
Rally's Restaurants Litigation & Risk Flags
3 Pending Actions ListedReview the full FDD for details on pending litigation.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Rally's Restaurants System Growth
Total Units
834
Franchised
568
Company-Owned
266
Rally's Restaurants currently operates 568 franchised locations and 266 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2019 | 32 | 15 | 890 |
| 2020 | 23 | 49 | 847 |
| 2021 | 11 | 17 | 834 |
Transfers: 30 | Closures: 17
State Registrations
Registered in 15 states: CA, HI, IL, IN, MD, MI, MN, ND, NY, OR, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$332.0M
Rally's Restaurants Franchise — FAQ
The total investment to open a Rally's Restaurants franchise ranges from $169,052 to $2,368,316, per their Franchise Disclosure Document. This includes the initial franchise fee of $30,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Rally's Restaurants charges a royalty fee of 4% of Net Sales of gross sales, plus a 4.5% of Net Sales (advertising expenditure requirement) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Rally's Restaurants Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Rally's Restaurants to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Rally's Restaurants franchise owners report average revenue of $1.1M and median revenue of $1.0M. This is based on a sample of 372 units. Past performance does not guarantee future results.
Rally's Restaurants has been franchising since 1986. The FDD shows an investment range of $169,052-$2,368,316, a 4% of Net Sales royalty, and includes an Item 19 earnings disclosure. There are 3 pending litigation action(s). Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $30,000 and the total investment ranges from $169,052 to $2,368,316 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Rally's Restaurants and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Rally's Restaurants or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com