Does the Checkers franchise agreement allow the franchisor to accept payments from the franchisee after a breach of the agreement without waiving any rights?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
18.02 Waiver of Obligations. We and you may by written instrument unilaterally waive or reduce any obligation of the other under this Agreement. Any waiver granted by us shall be without prejudice to any other rights we may have, will be subject to continuing review by us and may be revoked, in our sole discretion, at any time and for any reason, effective upon delivery to you of ten (10) days' prior notice. You and we shall not be deemed to have waived any right reserved by this Agreement by virtue of any custom or practice of the parties at variance with it; any failure, refusal or neglect by you or us to exercise any right under this Agreement (except as provided in Section 18.03) or to insist upon exact compliance by the other with its obligations hereunder; any waiver, forbearance, delay, failure or omission by us to exercise any right, whether of the same, similar or different nature, with respect to other Restaurants; or the acceptance by us of any payments due from you after any breach of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, Checkers' acceptance of payments from a franchisee after a breach of the franchise agreement does not constitute a waiver of any rights Checkers may have. This is a fairly standard clause in franchise agreements, designed to protect the franchisor's ability to continue receiving payments while still addressing the franchisee's breach.
For a prospective Checkers franchisee, this means that even if you are in breach of your franchise agreement (for example, by failing to meet certain operational standards or by being late with royalty payments), Checkers can still accept your payments without giving up their right to take action against you for the breach. This could include demanding that you correct the breach, imposing penalties, or even terminating the franchise agreement.
This provision protects Checkers by ensuring they can continue to receive revenue while working to resolve any issues with a franchisee. It also means that a Checkers franchisee cannot assume that simply because Checkers continues to accept payments, the breach has been forgiven or is no longer an issue. Franchisees should always seek to remedy any breach as quickly as possible and obtain written confirmation from Checkers that the breach has been resolved to avoid future disputes.
It is important for prospective franchisees to understand this clause and its implications. While Checkers' acceptance of payments might indicate a willingness to work with the franchisee, it does not guarantee that Checkers will not pursue further action regarding the breach. Franchisees should maintain open communication with Checkers and document all efforts to correct any breaches to protect their interests.