What is the effect of the Checkers Existing Franchisee Incentive Addendum if the Franchise Agreement is terminated?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
4. Additional Condition(s).
- b. If you breach, fail to satisfy, or are later found to have violated or failed to satisfy, any of the criteria listed in Section 2 above in this Addendum, at any point during the Term, then in addition to any other remedies available under the Franchise Agreement (including termination) or at applicable law, you must pay us (no later than thirty (30) days after our written notice to you) the amount or value of any fee reduction, discount, or other benefit afforded to you hereunder.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, if a franchisee breaches the Existing Franchisee Incentive Addendum or fails to meet the requirements outlined in Section 2 of the addendum at any point during the term of the agreement, Checkers has the right to require the franchisee to pay back any benefits they received under the incentive program. This is in addition to any other remedies Checkers might pursue under the Franchise Agreement or applicable law, including termination of the agreement.
Section 2 of the Existing Franchisee Incentive Addendum outlines the qualifications that a franchisee must meet in order to be eligible for the incentive. These qualifications include being a current franchisee in good standing, complying with all effective agreements with Checkers and its affiliates, and opening the franchised restaurant within one year of signing the Franchise Agreement. If the franchisee fails to meet any of these qualifications, Checkers can demand repayment of the incentive.
In practical terms, this means that a Checkers franchisee who receives a $10,000 reduction in the initial franchise fee through the Existing Franchisee Incentive Addendum could be required to repay that amount if they later violate the terms of the addendum or the Franchise Agreement. This could happen for a variety of reasons, such as failing to maintain good standing with Checkers, breaching the Franchise Agreement, or failing to open the restaurant within the specified timeframe. This repayment provision serves as an additional incentive for franchisees to comply with the terms of the agreement and maintain good standing with the franchisor.