Does Checkers' approval of a franchise transfer constitute a representation about the fairness of the terms between the franchisee/owners and the transferee?

According to Checkers's 2025 Franchise Disclosure Document, Checkers's approval of a franchise transfer does not constitute a representation as to the fairness of the terms of any agreement between the franchisee/owners and the transferee. Nor does it represent any prospects of success for the transferred franchise. Furthermore, Checkers's approval does not release the transferor franchisee/owners from any claims or waive Checkers's right to demand compliance with the franchise agreement from the transferee.

This means that when a Checkers franchisee sells their franchise to a new owner, Checkers's approval of the transfer is simply an acknowledgement that the new owner meets Checkers's requirements to become a franchisee. It does not mean that Checkers is endorsing the financial terms of the sale or guaranteeing the success of the new franchisee. The prospective franchisee needs to conduct their own due diligence to determine if the purchase price and other terms of the transfer are reasonable and whether the business is likely to be successful under their management.

This is a standard practice in franchising, as franchisors typically want to ensure that new franchisees meet their operational and financial standards but do not want to get involved in negotiating the financial terms of the transfer between the buyer and seller. It is the responsibility of both the selling franchisee and the prospective franchisee to assess the fairness and viability of the transfer agreement. The franchisee should seek independent legal and financial advice before agreeing to the transfer terms.