What agreement must each person who becomes an Owner of a Checkers franchise execute, and what does it entail?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| In consideration of, and as an inducement to, the execution of the Franch | ise |
|---|---|
| Agreement dated as of, (the "Agreement") by a | nd |
| between CHECKERS DRIVE-IN RESTAURANTS, INC. ("Franchisor"), a | nd |
| ("Franchisee"), each of the undersigned owners of | an |
| nterest in Franchisee hereby personally and unconditionally: (1) guarantees | to |
| Franchisor and its successors and assigns, for the term of the Agreement a | nd |
| hereafter as provided in the Agreement, that Franchisee shall punctually pay a | nd |
| perform each and every undertaking, agreement and covenant set forth in t | he |
| Agreement and that each and every representation of Franchisee made | in |
| connection with the Agreement are true, correct and complete in all respects at a | nd |
| as of the time given; and (2) agrees personally to be bound by, and personally lial | ble |
| or the breach of, each and every provision in the Agreement, including without | out |
| imitation, Sections 5, 7, 8, 13, 16 and 18 (for the avoidance of doubt, includi | ing |
| Section 18.05) thereof. |
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, each owner of an interest in a Checkers franchisee entity must personally guarantee the franchisee's obligations under the Franchise Agreement. This means that each owner is not only bound by the agreement but also personally liable if the franchisee fails to meet its obligations.
Specifically, the owners guarantee that the franchisee will punctually pay and perform every undertaking, agreement, and covenant outlined in the Franchise Agreement. They also guarantee that all representations made by the franchisee in connection with the agreement are true, correct, and complete. This personal guarantee extends for the entire term of the Franchise Agreement and any extensions or renewals.
Furthermore, the owners personally agree to be bound by and liable for any breaches of the Franchise Agreement, including but not limited to sections concerning non-competition, confidentiality, transfer restrictions, dispute resolution, and governing law. This ensures that Checkers can seek recourse directly from the owners if the franchisee fails to comply with these critical aspects of the franchise relationship. This requirement is typical in franchising, as it provides the franchisor with added security that the franchisee will adhere to the agreement's terms.