What conditions must be met before Checkers offers a franchise agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
--|----------------| | | DATE | EFFECTIVE DATE | | California | | | | Illinois | | | | Indiana | April 7, 2025 | April 7, 2025 | | Maryland | | | | Michigan | April 3, 2025 | April 3, 2025 | | Minnesota | | Not Registered | | New York | | Not Registered | | Rhode Island | | Not Registered | | Virginia | | | | Wisconsin | April 7, 2025 | Not Registered |
Other states may require registration, filing, or exemption of a franchise under other laws, such as those that regulate the offer and sale of business opportunities or seller-assisted marketing plans.
ITEM 23 RECEIPT
This Franchise Disclosure Document for Checkers Restaurants and Rally's Restaurants summarizes certain provisions of the franchise agreement and other information in plain language. Read this Franchise Disclosure Document and all agreements carefully.
If Checkers Drive-In Restaurants, Inc. ("Checkers") offers you a franchise, Checkers must provide this Franchise Disclosure Document to you 14 calendar days before you sign a binding agreement with, or make a payment to us or an affiliate of ours in connection with the proposed franchise sale, or sooner if required by applicable state law. Applicable state law in (a) Michigan requires us to provide you the Franchise Disclosure Document at least 10 business days before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed franchise sale and (b) New York and Rhode Island require us to provide you the Franchise Disclosure Document the earlier of the first personal meeting or 10 business days before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed franchise sale.
If Checkers does not deliver this Franchise Disclosure Document on time or if it contains a false or misleading statement, or a material omission, a violation of federal law and state law may have occurred and should be reported to the Federal Trade Commission, Washington, D.C. 20580 and any applicable state agency.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, before Checkers offers a franchise agreement, they must provide the Franchise Disclosure Document (FDD) to the prospective franchisee within a specific timeframe. Generally, this means providing the FDD 14 calendar days before the franchisee signs a binding agreement or makes a payment related to the franchise. However, this timeframe may vary based on state laws. For example, in Michigan, the FDD must be provided at least 10 business days prior to signing or payment, while in New York and Rhode Island, it's the earlier of the first personal meeting or 10 business days before signing or payment.
Checkers also requires potential franchisees and their owners to provide financial statements, including historical and pro forma statements, sources and uses of capital funds, and budgets. This information helps Checkers evaluate the financial and management capabilities of the franchisee. The information provided must be complete, accurate, and meet Checkers' requirements. Checkers relies on this information to determine whether to grant a franchise.
Furthermore, Checkers may refuse to grant a franchise if the potential franchisee fails to demonstrate sufficient financial and management capabilities to properly develop and operate the proposed restaurant, as well as any existing restaurants they or their affiliates own. This evaluation is conducted based on Checkers' standard criteria. In California, the law requires that a copy of all proposed agreements relating to the sale of the franchise be delivered together with the FDD at least 14 days prior to execution of any binding franchise or other agreement, or at least 14 days prior to the receipt of any consideration, whichever occurs first.