What additional documents or actions are Checkers franchisees, Owners, and Affiliates required to execute or perform to protect Checkers' rights during a transfer?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
se agreement governing another Restaurant that is included as part of the transfer, the transfer fee will be Twenty Thousand Dollars ($20,000) or Ten Thousand Dollars ($10,000) for the first Restaurant, depending on whether the transfer is to a new franchisee or a then-current franchisee, plus Five Thousand Dollars ($5,000) for each additional Restaurant to be transferred;
- (i) you and your Owners and Affiliates must, except to the extent limited or prohibited by applicable law, execute a general release, in form and substance satisfactory to us, of any and all claims against us and our Affiliates, stockholders, officers, directors, employees, agents, successors and assigns;
- (j) we must not have disapproved the material terms and conditions of such transfer (including the price and terms of payment) on the basis that they are
so burdensome as to be likely, in our judgment, to adversely affect the transferee's operation of the Franchised Restaurant or its compliance with its franchise agreements and any development agreements;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, during a franchise transfer, franchisees, their owners, and affiliates must fulfill specific requirements to protect Checkers' rights. They must execute a general release, in a form satisfactory to Checkers, that releases any claims against Checkers, its affiliates, stockholders, officers, directors, employees, agents, successors, and assigns.
Additionally, if the franchisee, owners, or affiliates finance any part of the sale price, they must agree that the transferee's obligations and any security interests they hold in the restaurant's assets are subordinate to the transferee's obligations to Checkers and its affiliates. This subordination ensures that Checkers' financial interests are prioritized in the event of the transferee's financial difficulties.
Furthermore, the franchisee and their immediate family must refrain from engaging in activities proscribed in Section 16.03 of the franchise agreement for two years following the transfer's effective date. Finally, the franchisee, their owners, and affiliates must execute any other documents and perform any other actions that Checkers reasonably requires to protect its rights under the franchise agreement or any development agreement. These measures collectively aim to ensure a smooth transfer process while safeguarding Checkers' interests and brand integrity.