What conditions must Checkers franchisees and their owners meet to acquire a successor franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
15.02 Notices. You must give us written notice of your desire to acquire a successor franchise at least one hundred eighty (180) days prior to the expiration of this Agreement. We will give you notice, not later than sixty (60) days after receipt of your notice, of our decision whether or not you have the right to acquire a successor franchise pursuant to Section 15.01. Notwithstanding any notice of our decision that you have the right to acquire a successor franchise for the Franchised Restaurant, your right will be subject to your continued compliance with all the provisions of this Agreement up to the date of its expiration.
15.03 Agreements. If you have the right to acquire a successor franchise in accordance with Section 15.01 and state your desire to exercise that right in accordance with Section 15.02, we and you (and your Owners) will execute the form of franchise agreement (which may contain provisions, including royalty fees, materially different from those contained herein) and all ancillary agreements (including, personal guarantees by your Owners and a remodeling agreement on such terms as we determine to be appropriate) which we then customarily use in granting successor franchises for the operation of Restaurants. The successor franchise agreement will be for a successor franchise term of either ten (10) years or twenty (20) years, as you and we may then agree. You must pay us a successor franchise fee due upon signing the successor franchise agreement, depending on the duration of that future agreement's term, in the amount of: (i) one half (1/2), or fifty percent (50%), of the amount of our then current initial franchise fee due for new Restaurants, if your
successor franchise term is for twenty (20) years; or (ii) one-third (1/3), or thirty-three and one-third percent (33.33%), of the amount of our then current initial franchise fee due for new Restaurants, if your successor franchise term is for ten (10) years. In addition, you and your Owners must execute general releases, in form and substance satisfactory to us or as we then explicitly prescribe, of any and all claims against us, and our Affiliates, owners, officers, directors, employees, agents, successors and assigns. Failure by you (and your Owners) to sign such agreements and releases within thirty (30) days after delivery to you shall be deemed an election by you not to acquire a successor franchise for the Franchised Restaurant. Upon expiration of such successor franchise agreement, you will have a further right on terms and conditions contained in the successor franchise agreement to acquire a future successor franchise as we then prescribe.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, franchisees have the right to acquire a successor franchise under certain conditions. To begin the process, franchisees must provide written notice to Checkers at least 180 days before the current agreement expires. Checkers will then notify the franchisee of their decision regarding the successor franchise rights within 60 days of receiving the franchisee's notice. However, this right is contingent upon the franchisee's continued compliance with all provisions of the existing agreement up to its expiration date.
To finalize the successor franchise, the franchisee and their owners must execute Checkers' current form of franchise agreement, which may include different royalty fees and other provisions. They must also sign ancillary agreements, including personal guarantees from the owners and a remodeling agreement with terms determined by Checkers. The term of the successor franchise agreement will be either 10 or 20 years, as agreed upon by both parties.
Additionally, the franchisee must pay a successor franchise fee upon signing the new agreement. This fee is either one-half (50%) of the then-current initial franchise fee for new restaurants if the successor term is 20 years, or one-third (33.33%) if the term is 10 years. Both the franchisee and their owners must also execute general releases of all claims against Checkers and its affiliates. Failure to sign the required agreements and releases within 30 days of delivery will be considered an election not to acquire the successor franchise.