factual

What assets are included in the 'Purchased Assets' that Checkers may purchase upon termination or expiration?

Checkers Franchise · 2025 FDD

Answer from 2025 FDD Document

  • (a) Upon termination or expiration (without renewal) of this Agreement, we have the right, exercisable by giving notice thereof ("Appraisal Notice") within ten (10) days after the date of such termination or expiration, to require that a determination be made of the "Agreed Value" (as defined below) of all the personal property used in the Franchised Restaurant which you own, including inventory of non-perishable products, materials, supplies, furniture, equipment, signs, but excluding any cash and short-term investments and any items not meeting our specifications for Restaurants (the "Purchased Assets"). At any time following our providing you an Appraisal Notice, we shall have the unrestricted right to assign this option to purchase separate and apart from the remainder of this Agreement, including, without limitation, to another third-party franchisee. Upon such notice, you may not sell or remove any of the personal property of the Franchised Restaurant from the Premises and must give us (or our assignee), our (or our assignee's) designated agents and the "Appraiser" (as defined below) full access to the Franchised Restaurant and all of your books and records at any time during customary business hours in order to conduct inventories and determine the purchase price for the Purchased Assets.

Source: Item 22 — CONTRACTS (FDD pages 91–92)

What This Means (2025 FDD)

According to Checkers' 2025 Franchise Disclosure Document, if the franchise agreement is terminated or expires without renewal, Checkers has the option to purchase specific assets from the franchisee. These 'Purchased Assets' include all personal property used in the franchised restaurant that the franchisee owns.

Specifically, the assets Checkers may purchase encompass a range of items necessary for restaurant operations. This includes the inventory of non-perishable products, materials, and supplies. Additionally, furniture, equipment, and signs are included in the assets Checkers may purchase.

However, the 'Purchased Assets' specifically exclude any cash and short-term investments the franchisee holds. Also excluded are any items that do not meet Checkers' specifications for restaurants. This ensures that Checkers only purchases assets that align with their brand standards and operational needs.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.