What agreement must the transferee of a Checkers franchise agree to?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
st otherwise meet our approval;
- (d) the proposed transferee may not be an entity, or be affiliated with an entity, that is required to comply with reporting and information requirements of the Securities Exchange Act of 1934, as amended;
- (e) the transferee (or its operating partner) and its operators must have completed our initial training program to our satisfaction;
- (f) the transferee (and its owners) must agree to be bound by all of the provisions of this Agreement for the remainder of its term or, at our option, execute our then current standard form of franchise agreement and related documents used in the state in which the Franchised Restaurant is located (which
may provide for different royalties, advertising contributions and expenditures, duration and other rights and obligations than those provided in this Agreement and which we may require to be guaranteed by you and your Owners);
- (g) if you executed this Agreement pursuant to a development agreement, then the transferee must acquire, in a concurrent transaction, all of your rights, and the rights of your Owners and Affiliates, under such development agreement (or any successor development agreement) and all franchise agreements for Restaurants that you or your Owners or Affiliates executed pursuant to such development agreement (or any predecessor or successor development agreement);
- (h) the transferee agrees (if the transfer is of this Agreement) to upgrade, remodel, expand and/or remodel the Franchised Restaurant in accordance with our current prescribed plans, specifications and design model for Restaurants (including, without limitation, any modifications or adjustments we authorize and timely introduce for similarly-situated Restaurants, or otherwise incorporate into the System for all franchisees) and to add or replace fixtures, furniture, equipment, signs and supplies in accordance with our then current requirements and specifications for Restaurants within the time period we specify following the effective date of the transfer (we will advise the transferee before the effective date of the transfer of the specific actions that it must take and the time period within which such actions must be taken);
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a transferee must agree to be bound by all the provisions of the existing Franchise Agreement for the remainder of its term. Alternatively, at Checkers' option, the transferee may be required to execute the then-current standard form of franchise agreement and related documents used in the state where the Franchised Restaurant is located. This new agreement may include different royalties, advertising contributions and expenditures, duration, and other rights and obligations compared to the original agreement. Checkers may also require the transferor and their owners to guarantee the obligations under the new agreement.
If the original agreement was executed under a development agreement, the transferee must acquire all rights and obligations under that development agreement, including all franchise agreements for Restaurants executed under it. The transferee must also agree to upgrade, remodel, and/or expand the Franchised Restaurant according to Checkers' current standards, including any modifications introduced for similar restaurants. This includes adding or replacing fixtures, furniture, equipment, signs, and supplies to meet Checkers' current requirements, within a specified time frame communicated before the transfer's effective date.
Before the transferee can begin operating the Franchised Restaurant, Checkers must receive a transfer fee. The standard transfer fee is $20,000, but it is reduced to $10,000 if the transferee is an existing Checkers franchisee. If the transfer involves multiple Restaurants being transferred on the same day, the fee is $20,000 (or $10,000 for a current franchisee) for the first Restaurant, plus $5,000 for each additional Restaurant included in the transfer. This fee structure applies regardless of any conflicting terms in other franchise agreements included in the transfer.
These conditions ensure that Checkers maintains consistent brand standards and operational practices across all its franchise locations, even when ownership changes. Prospective franchisees should carefully consider these requirements and associated costs when planning for a potential transfer of their franchise.