What is the consequence if a Checkers franchisee fails to promptly deliver amendments to organizational documents?
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' 2025 Franchise Disclosure Document, if a franchisee operates as a business corporation, partnership, limited liability company, or other legal entity, they must provide Checkers with copies of all documents relating to their ownership, organization, capitalization, management, and control. This includes articles of incorporation, partnership agreements, bylaws, subscription agreements, buy-sell agreements, and voting trust agreements. Furthermore, the franchisee is obligated to promptly deliver any amendments to these documents to Checkers.
The FDD excerpt does not explicitly state the consequences of failing to promptly deliver these amendments. However, the franchise agreement likely contains provisions outlining the repercussions of failing to comply with its terms. These could include financial penalties, default notices, or even termination of the franchise agreement if the failure is not rectified within a specified timeframe.
Prospective Checkers franchisees should carefully review the entire franchise agreement, particularly the sections on compliance and termination, to fully understand the potential ramifications of not adhering to the requirement of promptly delivering amendments to organizational documents. It would be prudent to seek clarification from Checkers regarding the specific consequences of such a failure to ensure full compliance and avoid potential disputes.