What does Exhibit A represent regarding ownership interests in a Checkers franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.02 Disclosure of Ownership Interests. You and all of your Owners represent, warrant and agree that Exhibit A is current, complete and accurate as of the Effective Date. You agree to promptly notify us of any proposed or intended change to your ownership structure during the Term, to obtain our approval in accordance with the transfer conditions of Section 13.02 below before initiating any such change, and to sign a then-updated and accurate form of Exhibit A (which will replace its predecessor version of Exhibit A) if we approve the change. Each person who is or becomes an Owner must execute an agreement in form and substance as we then prescribe, undertaking to be bound jointly and severally by this Agreement. Each Owner must be an individual acting in his individual capacity, unless we waive this requirement.
- 8.03 Operating Partner. If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate in Exhibit A as the "Operating Partner" an individual we approve who must: (a) own and control, or have the right to own and control (subject to conditions reasonably acceptable to us) not less than ten percent (10%) of your equity and voting rights; (b) have the authority to make, and bind you and all your Owners to, all operational decisions regarding the Franchised Restaurant; and (c) complete our training program to our satisfaction before engaging in his or her operational duties. You may not change the Operating Partner without our prior written consent.
You (or your Operating Partner): (a) shall exert full-time, best efforts to the development and operation of the Franchised Restaurant and all other Restaurants you own; and (b) may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise may conflict with your obligations hereunder.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Exhibit A is a document that discloses the ownership interests in the franchise. Franchisees and their owners must represent, warrant, and agree that Exhibit A is current, complete, and accurate as of the effective date of the franchise agreement. Franchisees must promptly notify Checkers of any proposed changes to their ownership structure during the term of the agreement and obtain approval before initiating any such change. If Checkers approves the change, the franchisee must sign an updated version of Exhibit A, which will replace the previous version. Each person who is or becomes an owner must execute an agreement to be bound jointly and severally by the franchise agreement.
The document also specifies that each owner must be an individual acting in their individual capacity, unless Checkers waives this requirement. If the franchisee is a business entity, such as a corporation, partnership, or limited liability company, they must designate an Operating Partner in Exhibit A. This Operating Partner must be approved by Checkers and must own and control at least 10% of the franchisee's equity and voting rights. The Operating Partner must have the authority to make operational decisions for the franchised restaurant and must complete Checkers's training program.
The franchisee, or their Operating Partner, must exert full-time effort to develop and operate the franchised restaurant and may not engage in any other business or activity that requires substantial management responsibility or time commitments that could conflict with their obligations under the franchise agreement. These stipulations ensure that Checkers maintains control over the ownership and operation of its franchises and that franchisees are fully committed to the success of their restaurants.