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M A R C H / A P R I L 2 0 1 7 • r e s t a u r a n t d e v e l o p m e n t + d e s i g n • 2 3 consumers and looked at the designs with them. What was interesting in talk- ing to consumers was that they liked the more traditional-build look more than the container concept and design [that drew attention to the fact that it was clearly a former shipping container]. You can still tell up close. You can see the corrugation in the container. It's also different in that the roof lines are much more rectangular. When on-site, it has a different aesthetic and feel, but it was well-received by con- sumers. We've gotten positive sentiments about reusing containers, and it looks spacious and contemporary and cool, but it still has the branding elements of Checkers & Rally's that people love. Do the styles within Model 4.0 have any other noticeable variations? JD: The site layout is exactly the same for each. The difference is in the materi- als and the construction. There are no changes to the equipment packages, so the 4.0 design is all consistent. Franchi- sees can choose the building format that best suits them. Where does the rollout stand? JD: Several are in process and underway. Franchisees are picking the building style that makes the most sense for them and their market. In some cases, modular building makes the most sense, and in others, on-site construction makes sense. The primary driver is cost and return on investment. The selling point of a modular building is that it is treated as equipment, and it's a tax benefit to be able to record depreciation more quickly [at seven years]. The typical asset life of a building is 39.5 years. Owners are always looking at how to lower taxes. Some mu- nicipalities have additional tax incentives for sustainable designs that may create an advantage for a container building. Which style has gotten the most interest so far and why? JD: Right now, modular is coming out as the most cost-effective. It allows flexibility. Since modular units are built off-site and then assembled on-site, it can be very effective with 8 to 12 weeks' lead time. In the case of modular building, you can begin construction as you get permits for the site. Once you have permits, you can have the building shipped in. In traditional construction, things work more sequentially, but in this format, things can run concurrently. One of our primary goals has and always will be unit-level profitability and strong returns. And we will continue to bring innovations that differentiate Checkers & Rally's from other brands in the QSR space. + The first Checkers & Rally's modular unit opened in Miami in January. The Checkers and Rally's model 4.0 Prototype. Photo courtesy of Checkers and Rally's