What aspects of organization and management are detailed in Section 8 of the Checkers Franchise Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
8. YOUR ORGANIZATION AND MANAGEMENT.
Organizational Documents. If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you and each of your Owners represent, warrant and agree that: (a) you are duly organized and validly existing under the laws of the state of your organization, and, if a foreign business corporation, partnership, limited liability company or other legal entity, you are duly qualified to transact business in the state in which the Franchised Restaurant is located; (b) your undersigned signatory below has the authority to execute and deliver this Agreement on your behalf and that you are able and authorized to perform your obligations hereunder; (c) true and complete copies of the articles of incorporation, partnership agreement, bylaws, subscription agreements, buy-sell agreements, voting trust agreements and all other documents relating to your ownership, organization, capitalization, management and control have been delivered to us and all amendments thereto shall be promptly delivered to us; (d) your activities are restricted to those necessary solely for the development, ownership and operation of Restaurants in accordance with this Agreement and in accordance with any other agreements entered into with us or any of our Affiliates; (e) the articles of incorporation, partnership agreement or other organizational documents recite that the issuance, transfer or pledge of any direct or indirect legal or beneficial ownership interest is restricted by the terms of this Agreement; and (f) all
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Section 8 of the franchise agreement pertains to the franchisee's organization and management structure. If the franchisee is a business entity such as a corporation, partnership, or LLC, they must meet certain requirements. These include being duly organized and validly existing under the laws of their state of organization, and being properly qualified to conduct business in the state where the franchised restaurant is located. The franchisee's signatory must have the authority to execute the agreement.
Checkers requires franchisees to provide true and complete copies of all organizational documents, including articles of incorporation, partnership agreements, bylaws, subscription agreements, buy-sell agreements, and voting trust agreements. Any amendments to these documents must also be promptly provided to Checkers. The franchisee's business activities must be restricted to those necessary for the development, ownership, and operation of Checkers restaurants, in accordance with the franchise agreement and any other agreements with Checkers or its affiliates.
The organizational documents must state that the issuance, transfer, or pledge of any ownership interest is restricted by the terms of the franchise agreement. All certificates representing ownership interests must bear a legend that refers to these restrictions, in accordance with applicable law. This ensures that Checkers maintains control over who can own or manage a franchise and helps protect the brand's standards and reputation.
These stipulations are typical in franchise agreements to ensure the franchisor maintains a consistent brand and operational standards across all locations. Prospective franchisees should carefully review these requirements and ensure they can comply with them, as failure to do so could result in a breach of the franchise agreement.