What is the consequence if a Checkers franchisee fails to obtain approval before initiating a change to their ownership structure?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.01 Franchisor's Approval. The rights and duties created by this Agreement are personal to you or, if you are a business corporation, partnership, limited liability company or other legal entity, your Owners. Accordingly, neither you nor any of your Owners may transfer the Franchise without our approval and without complying with all of the provisions of Section 13. Any transfer without such approval or compliance constitutes a breach of this Agreement and is void and of no force or effect.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, a franchisee's rights and duties under the franchise agreement are personal, extending to the franchisee's owners if the franchisee is a business entity. As such, neither the franchisee nor their owners can transfer the franchise without Checkers's approval and compliance with the conditions outlined in Section 13 of the agreement.
Specifically, any transfer of the franchise without obtaining prior approval from Checkers or without adhering to the specified conditions constitutes a breach of the franchise agreement.
The consequence of such unapproved transfer is that it is considered void and of no legal effect, meaning the purported transfer is not recognized and has no validity.
This provision underscores Checkers's control over who operates its franchises and ensures that all franchisees meet the company's standards and qualifications. It protects the brand by preventing unauthorized parties from taking over a franchise without proper vetting and training.