What is considered a cross-default under the Checkers agreement?

According to Checkers' 2025 Franchise Disclosure Document, a cross-default occurs when a franchisee (or their owners) or their affiliate (or their owner's affiliates) breaches any agreement with Checkers or its affiliates. Conversely, a breach of the Franchise Agreement itself is considered a default under any and all agreements between Checkers (or its affiliates) and the franchisee (or their owners) or the franchisee's affiliates (or their owner's affiliates).

This means that if a Checkers franchisee defaults on one agreement with Checkers, such as a development agreement or a loan agreement, it will trigger a default under the Franchise Agreement. Similarly, a default under the Franchise Agreement will trigger a default under all other agreements the franchisee has with Checkers.

The FDD specifies that if the default under any other agreement would have been considered an event of default under the Franchise Agreement, then Checkers or its affiliate has the right to terminate all other agreements between them and the franchisee (or their owners) or the franchisee's affiliate (or their owner's affiliates) in accordance with the termination provisions of the Franchise Agreement. This provision gives Checkers a significant advantage, allowing them to terminate all agreements with a franchisee if a default occurs under any single agreement, thereby consolidating their legal recourse.