When Checkers exercises its rights under the Addendum, what rights and interests in the Lease is Checkers entitled to?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
r assign the lease or to sublease the Premises to either an entity owned or controlled by Franchisor, or to another [Checkers] franchisee upon obtaining Landlord's written consent, which consent may not be unreasonably withheld, conditioned or delayed by Landlord. No assignment permitted under this Section is subject to any assignment or similar fee or will cause any rental acceleration.
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- Upon Franchisor's delivery to Landlord and Tenant of its election to exercise its rights under this Addendum, Franchisor shall be entitled to all of Tenant's rights and interests in the Lease, as if Franchisor were the tenant under the Lease, including, by way of example and not limitation, the right to exercise any and all renewal options thereunder, without the need for any further action or instrument.
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- Landlord and Tenant expressly agree that Franchisor is an intended third party beneficiary of the terms of this Addendum. Landlord and Tenant further agree that Franchisor has no liability or obligation under the Lease unless and until Franchisor exercises it right to assume the Lease under this Addendum.
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- In the event of any inconsistency between the terms of this Addendum and the terms of the Lease, the terms of this Addendum control.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, when Checkers exercises its rights under the Franchise Addendum to Lease Agreement, it is entitled to all of the tenant's rights and interests in the lease. This includes the right to exercise any and all renewal options, as if Checkers were the original tenant. No further action or instrument is needed for Checkers to assume these rights.
This provision ensures that Checkers can maintain control over the restaurant location, which is critical for preserving brand consistency and operational standards. By stepping into the tenant's shoes, Checkers can continue operating the restaurant, assign the lease to another franchisee, or otherwise manage the property as needed. This is particularly important if a franchisee defaults on the lease or the franchise agreement is terminated.
The landlord and tenant expressly agree that Checkers is a third-party beneficiary of the terms of the addendum. However, Checkers has no liability or obligation under the lease unless and until it exercises its right to assume the lease. This arrangement protects Checkers from being held responsible for the franchisee's obligations unless Checkers actively takes over the lease.
In case of any conflict between the terms of the addendum and the lease, the terms of the addendum will prevail. All terms of the addendum are binding upon and enforceable by the parties and their representatives, heirs, successors, and permitted assigns. Any changes to the addendum must be made in writing and approved by all parties, including Checkers.