What are some examples of non-curable defaults that could lead to termination of the Checkers franchise agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| h. | "Cause" defined non-curable defaults | Sections 14.01 and 14.02 | Includes insolvency, failure to open or abandonment of business, cancellation of lease, misrepresentations, conviction of a felony, unauthorized transfer, unauthorized disclosure of confidential information, understatement of the Franchised Restaurant's Net Sales 3 times or more during the Term or by more than 5% on any one occasion, and repeated breaches of the Franchise Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, there are specific defaults that Checkers franchisees cannot cure, which could lead to the termination of their franchise agreement. These non-curable defaults are outlined in Sections 14.01 and 14.02 of the agreement.
Examples of such defaults include insolvency, which means the franchisee is unable to pay their debts. Another is the failure to open or abandonment of the business, indicating the franchisee is not operating the restaurant as agreed. The cancellation of the lease for the restaurant location also constitutes a non-curable default. Misrepresentations made by the franchisee, conviction of a felony, unauthorized transfer of the franchise, or unauthorized disclosure of confidential information are also included.
Furthermore, Checkers can terminate the franchise agreement if a franchisee understates the Franchised Restaurant's Net Sales 3 times or more during the Term or by more than 5% on any one occasion, and repeated breaches of the Franchise Agreement. These defaults are considered severe enough to warrant immediate termination because they indicate a fundamental failure to adhere to the franchise agreement or pose a significant risk to the Checkers brand and financial interests.