What constitutes 'good cause' for Checkers to terminate a franchise agreement?

According to Checkers' 2025 Franchise Disclosure Document, 'good cause' for termination includes the franchisee's failure to comply with any lawful provision of the franchise agreement, provided the franchisee is given written notice of the failure and a reasonable opportunity to correct it. The FDD specifies that the cure period need not be more than 30 days. This definition of 'good cause' is relevant to franchise agreements within the state of Michigan.

This stipulation protects franchisees by preventing Checkers from terminating agreements without a legitimate reason and a chance for the franchisee to rectify the issue. It aligns with common franchise practices that emphasize fair dealing and reasonable notice periods. The 30-day cure period provides a tangible timeframe for franchisees to address any shortcomings and maintain their franchise agreement.

However, the FDD also notes that a federal court held that this provision of the Michigan law was preempted by the Federal Arbitration Act and therefore is not enforceable. Checkers intends to enforce the arbitration clause as it is written in the agreements. This means that while the state law aims to protect franchisees from termination without good cause, the enforceability of this protection may be limited due to federal law and Checkers' intent to enforce arbitration clauses.