The Merger
Rally's adopted the double drive-thru system based on statistics that showed 50% of all fast-food burger service is either takeout or drive-thru. The 1950’s style drive-in arrangement created an instant distinction from Mega-brand competitors. But the franchises over-expansion in 1993 caused losses that swelled to $47 million in 1994 decreasing its $20 stock to a paltry $2.50 a share by the end of 1995. In 1996, Rally’s attempted to improve the quality of its burgers by increasing meat patty size and the following year began negotiations with Checkers Drive-In Restaurants for a projected buyout. Unfortunately, the Securities and Exchange Commission played interference causing financial barriers that drove the two companies to withdraw from negotiations until 1999 when a stock exchange agreement developed allowing Rally’s to purchase 19 million shares of Checkers, making them the largest shareholder of the company’s common stock at 27%. The unofficial merger was completed in 2000 with Checkers Drive-In Restaurants as the official holding company.From here a new tag line, facelift, and new direct marketing innovations resulted in an 11.2% sales increase by the end of 2001. By 2003, Rally’s was the exclusive burger provider at the Indianapolis 500 and Brickyard 400 auto races replacing Mega Brand, McDonalds, but withdrew its sponsorship in 2008, one year before its contract was due to end.
Today, Checkers/Rally’s has increased its menu offerings from 11 to 14 options and is investing in end-cap and in-line units to increase accessibility in order to attract more franchisees to limited access sites. These new prototypes feature indoor seating with a single drive-thru making them accessible at strip mall end-units.
