Where can I find the important provisions of the Checkers franchise agreement and related agreements?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP]
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| m. | Conditions for franchisor's approval of transfer | Section 13.02 | Restaurant must have opened. Transferee must qualify, complete training, sign existing or new agreement and pay transfer fee; you must guaranty transferee obligations; transferee cannot be public company. You must transfer all of your Restaurants; be in compliance with agreements; subordinate debts and sign a release and non-compete for each transferred Restaurant; we must approve price and payment terms; transferee must agree to remodel; you must execute such other documents that we may reasonably require to protect our rights under the Franchise Agreement and any development agreement. |
| n. | Franchisor's right of first refusal | Section 13.06 | We can match any offer for your business. |
| o. | Franchisor's option to purchase franchisee's franchise | Section 16.04 | We may acquire your Franchised Restaurant upon expiration (without renewal) at fair market value and upon termination at appraised asset value or net book value, whichever is less. |
| p. | Death or disability of franchisee | Section 13.05 | Franchise must be assigned by estate within nine months to a third party we have approved. |
| q. | Non-competition covenants during the term of the franchise | Section 7.02 | No involvement in any competing business regardless of its location. |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 16.03 | No competing business for 2 years at the Premises of your Franchised Restaurant, or within 3 miles of your Franchised Restaurant or any other Checkers Restaurant or Rally's Restaurant. |
| s. | Modification of the agreement | Section 18.10 | Generally, no modifications except by written agreement signed by both parties. However, the Operations Manual and System are subject to change by us. |
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP]
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY |
|---|---|---|
| o. Franchisor’s option | Not applicable | Not applicable |
| to purchase | ||
| developer’s | ||
| development rights | ||
| p. Death or disability | Section 7.05 | Franchise must be assigned by estate to |
| of developer | approved buyer within nine months. | |
| q. Non-competition covenants during the term of the agreement | Section 6.02 | No involvement in any competing business regardless of its location. |
| r. Non-competition covenants after the agreement is terminated or expires | Section 9.02 | No competing business for 2 years within your Development Area or within 3 miles of any other Checkers Restaurant or Rally's Restaurant. |
| s. Modification of the | Section 10.10 | No modifications except by written |
| agreement | agreement signed by both parties. | |
| t. Integration/merger clause | Section 10.11 | Only terms of Development Agreement are binding (subject to state law); any representations or promises outside the disclosure document and development agreement may not be enforceable. However, nothing in the Development Agreement or any related agreement is intended to disclaim our representations made in this Disclosure Document. |
| u. Dispute resolution by negotiation, mediation & arbitration | Section 10.06 | All claims, disputes and controversies shall be arbitrated on demand by either party. |
| v. Choice of forum | Section 10.05 | If dispute is not arbitrated, then Florida State and Federal courts (subject to state law, see Exhibits I and J). |
| w. Choice of law | Section 10.07 | Subject to state law, Florida law applies generally, except for applicable franchise laws of other states (see Exhibits I and J). |
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP]
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| o. | Franchisor's option to purchase developer's development rights | Not applicable | Not applicable |
| p. | Death or disability of developer | Section 7.05 | Franchise must be assigned by estate to approved buyer within nine months. |
| q. | Non-competition covenants during the term of the agreement | Section 6.02 | No involvement in any competing business regardless of its location. |
| r. | Non-competition covenants after the agreement is terminated or expires | Section 9.02 | No competing business for 2 years within your Development Area or within 3 miles of any other Checkers Restaurant or Rally's Restaurant. |
| s. | Modification of the agreement | Section 10.10 | No modifications except by written agreement signed by both parties. |
| t. | Integration/merger clause | Section 10.11 | Only terms of Development Agreement are binding (subject to state law); any representations or promises outside the disclosure document and development agreement may not be enforceable. However, nothing in the Development Agreement or any related agreement is intended to disclaim our representations made in this Disclosure Document. |
| u. | Dispute resolution by negotiation, mediation & arbitration | Section 10.06 | All claims, disputes and controversies shall be arbitrated on demand by either party. |
| v. | Choice of forum | Section 10.05 | If dispute is not arbitrated, then Florida State and Federal courts (subject to state law, see Exhibits I and J). |
| w. | Choice of law | Section 10.07 | Subject to state law, Florida law applies generally, except for applicable franchise laws of other states (see Exhibits I and J). |
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP]
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| t. | Integration/merger clause | Section 18.11 | Only the terms of Franchise Agreement are binding (subject to state law); any representations or promises made outside the disclosure document and franchise agreement may not be enforceable. However, nothing in the Franchise Agreement or any related agreement is intended to disclaim our representations made in this Disclosure Document. |
| u. | Dispute resolution by negotiation, mediation & arbitration | Section 18.05 | All controversies, disputes or claims shall on demand by either party be arbitrated. |
| v. | Choice of forum | Section 18.05 | If dispute is not arbitrated, then Florida state and federal courts (subject to state law, see Exhibits I and J). |
| w. | Choice of law | Section 18.07 | Subject to state law, Florida law applies generally, except for applicable franchise laws of other states (see Exhibits I and J). |
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP]
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| d. | Termination by franchisee | Not applicable | Not applicable |
| e. | Termination by franchisor without cause | Not applicable | Not applicable |
| f. | Termination by franchisor with cause | Section 14 | We can terminate only for specified causes. |
| g. | "Cause" defined: defaults which can be cured | Section 14.02 | You have 24 hours to cure health violation, 10 days to cure failure to pay us and 30 days to cure any other breaches of the Franchise Agreement. |
| 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. |
| i. | Franchisee's obligations on termination/ nonrenewal | Section 16 | Pay amounts owed, discontinue use of Marks and confidential information; return manuals; at our option, sell or lease the Restaurant to us or our designee. |
| j. | Assignment of contract by franchisor | Section 18.08 | No restriction on our right to assign. |
| k. | "Transfer" by franchisee defined | Section 1.04 | Includes transfer of agreement, sale of business and ownership changes. |
| l. | Franchisor's approval of transfer by franchisee | Sections 13.01 and 13.02 | We have the right to approve all transfers but will not unreasonably withhold approval if certain conditions satisfied. |
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP]
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| e. | Termination by franchisor without cause | Not applicable | Not applicable |
| f. | Termination by franchisor with cause | Section 8 | We can terminate only for specified causes (if we terminate, we may also terminate any franchise agreements you have signed with us) |
| g. | "Cause" defined: curable defaults | Section 8.02 | 30 days to cure certain breaches of the Development Agreement. |
| h. | "Cause" defined non-curable defaults | Sections 8.01 and 8.02 | Includes insolvency; failure to meet development schedule; unauthorized transfer; misrepresentations; conviction of a felony; unauthorized disclosure of confidential information; any default by you under a franchise agreement; adverse franchise legislation. |
| i. | Developer's obligations on termination/ nonrenewal | Section 9 | Comply with covenant not to compete |
| j. | Assignment of contract by franchisor | Section 10.08 | No restriction on our right to assign |
| k. | "Transfer" by developer defined | Section 1.04 | Includes transfer of agreement, sale of business and ownership changes. |
| l. | Franchisor's approval of transfer by developer | Sections 7.01 and 7.02 | We have the right to approve all transfers but will not unreasonably withhold approval if conditions satisfied. |
| m. | Conditions for franchisor's approval of transfer | Section 7.02 | You must transfer all of your Restaurants; be in compliance with agreements; have at least one Restaurant open; sign release and non-compete for each transferred restaurant; and do other things we request. Transferee must qualify, sign existing agreement and pay transfer fee; transferee cannot be public company. |
| n. | Franchisor's right of first refusal | Section 7.06 | We can match any offer for your development rights. |
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, Item 17 provides a summary of important provisions within the franchise agreement and other related agreements. The item is presented in a table format, outlining specific provisions, their corresponding sections in the franchise or other agreements, and a brief summary of each provision. This allows prospective franchisees to quickly locate and understand key aspects of their contractual obligations and rights.
Several provisions are detailed, such as those concerning the franchisor's right to purchase the franchisee's franchise, conditions for transfer approval, and actions required upon the death or disability of a franchisee. For instance, Checkers has the option to acquire a franchised restaurant upon expiration (without renewal) at fair market value and upon termination at appraised asset value or net book value, whichever is less. Transfer of a franchise requires the restaurant to be open, the transferee to qualify and complete training, and the signing of existing or new agreements, among other conditions.
Item 17 also covers critical topics like non-competition covenants, both during and after the franchise term. During the franchise term, franchisees cannot be involved in any competing business, regardless of location. After termination or expiration, franchisees are restricted from engaging in a competing business for two years within the premises of their former restaurant or within three miles of any Checkers or Rally's Restaurant. These non-compete clauses are common in franchising to protect the brand and market share.
Furthermore, the table addresses modification of the agreement, dispute resolution, choice of forum, and choice of law. Modifications generally require a written agreement signed by both parties, although Checkers retains the right to change the Operations Manual and System. Disputes are to be resolved through negotiation, mediation, and arbitration, with Florida state and federal courts serving as the choice of forum if arbitration is not pursued. Florida law generally applies, except for applicable franchise laws of other states, as detailed in Exhibits I and J. These provisions are crucial for understanding the legal framework governing the franchise relationship.