What is the covenant made by the franchisee regarding suing Checkers after signing the release?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
D FRANCHISEE RELEASE**
| Ended | through January 3, | ||||
|---|---|---|---|---|---|
| 2024 (Successor) (Successor) | December 30, January 1, 2024 June 16, 2023 (Predecessor) | 2023 through | |||
| Federal income tax benefit computed at | |||||
| statutory rate | $ (727) $ | (494) $ | (20,786) | ||
| State and local income tax benefit, net of federal | |||||
| income tax benefit | 9 | (20) | (3,871) | ||
| Permanent differences and other | 841 | 397 | 2,203 | ||
| Unrecognized tax benefits | (109) | - | 10 | ||
| Other | 577 | 16 | 1,778 | ||
| Deferred tax asset write-off | 3,305 | - | 2,366 | ||
| State accrual changes | - | - | 544 | ||
| State tax rate change | 159 | - | (17) | ||
| Change in deferred tax asset valuation | |||||
| allowance | (28,778) | 641 | 10,231 | ||
| Total income tax expense (benefit) | $ (24,723) $ | 540 $ | (7,542) | Consistent with the previous introduction, you, on your own behalf and on behalf of your successors, heirs, executors, administrators, personal representatives, agents, assigns, partners, shareholders, members, directors, officers, principals, employees, and affiliated entities (collectively, the "Releasing Parties"), hereby forever release and discharge us and our current and former officers, directors, shareholders, principals, employees, agents, representatives, affiliated entities, successors, and assigns (collectively, the "Checkers Parties") from any and all claims, damages (known and unknown), demands, causes of action, suits, duties, liabilities, and agreements of any nature and kind (collectively, "Claims") that you and any of the other Releasing Parties now has, ever had, or, but for this document, hereafter would or could have against any of the Checkers Parties (1) arising out of or related to the Checkers Parties' obligations under the Franchise Agreement or (2) otherwise arising from or related to your and the other Releasing Parties' relationship, from the beginning of time to the date of your signature below, with any of the Checkers Parties. |
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a franchisee, along with their successors, heirs, and other related parties, agrees not to sue Checkers and its related parties regarding any claims released in the agreement. This includes claims, damages, demands, causes of action, suits, liabilities, and agreements that the franchisee has, had, or could have against Checkers, arising from the Franchise Agreement or the relationship between the parties, from the beginning of time until the date of signing the release. This is a significant commitment, as it potentially prevents franchisees from pursuing legal action against Checkers for a broad range of issues. However, in Maryland, the release does not apply to the extent prohibited by the Maryland Franchise Registration and Disclosure Law, and a franchisee may commence a lawsuit against Checkers in Maryland for claims arising under this law, subject to arbitration obligations.
This covenant not to sue also extends to the franchisee's owners, who must separately sign to grant the release and covenant. The franchisee also represents that they have not assigned any of the released claims to any individual or entity not bound by this paragraph. This ensures that third parties cannot bring claims on behalf of the franchisee for matters covered by the release.
It is important to note that this covenant not to sue does not disclaim or require a waiver of reliance on any representation made by Checkers in their Franchise Disclosure Document. This means that franchisees retain their rights regarding the accuracy and completeness of the information provided in the FDD. Franchisees should carefully review the release and covenant not to sue with legal counsel to fully understand the scope of the claims being released and the implications of agreeing not to sue Checkers.