Does Checkers' approval of a transfer of Development Rights constitute a representation as to the fairness of the terms between the franchisee and the transferee?

According to Checkers' 2025 Franchise Disclosure Document, Checkers' approval of a transfer of Development Rights does not constitute a representation as to the fairness of the terms of any agreement between the franchisee and the transferee, nor does it guarantee the transferee's success. This means that Checkers' main concern in approving a transfer is whether the new franchisee meets their standards and will uphold the franchise agreement, not whether the financial terms of the transfer are favorable to either party.

This is a standard practice in franchising, as franchisors typically want to ensure that any new franchisee is capable of maintaining the brand's standards and contributing to the overall success of the franchise system. The financial arrangements between the outgoing and incoming franchisees are generally considered their own responsibility.

For a prospective Checkers franchisee, this means they should not rely on Checkers' approval of a transfer as an endorsement of the deal's fairness. It is crucial for both the transferring franchisee and the incoming franchisee to conduct their own due diligence and seek independent legal and financial advice to ensure the terms of the transfer agreement are acceptable and beneficial to them. The incoming franchisee needs to assess the market and potential for the restaurants, while the seller needs to ensure they are getting fair value for the business.