In the Checkers Franchise Agreement, for how long does the personal guarantee of the Franchisee owners extend?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| In consideration of, and as an inducement to, the execution of the Franch | ise |
|---|---|
| Agreement dated as of, (the "Agreement") by a | nd |
| between CHECKERS DRIVE-IN RESTAURANTS, INC. ("Franchisor"), a | nd |
| ("Franchisee"), each of the undersigned owners of | an |
| nterest in Franchisee hereby personally and unconditionally: (1) guarantees | to |
| Franchisor and its successors and assigns, for the term of the Agreement a | nd |
| hereafter as provided in the Agreement, that Franchisee shall punctually pay a | nd |
| perform each and every undertaking, agreement and covenant set forth in t | he |
| Agreement and that each and every representation of Franchisee made | in |
| connection with the Agreement are true, correct and complete in all respects at a | nd |
| as of the time given; and (2) agrees personally to be bound by, and personally lial | ble |
| or the breach of, each and every provision in the Agreement, including without | out |
| imitation, Sections 5, 7, 8, 13, 16 and 18 (for the avoidance of doubt, includi | ing |
| Section 18.05) thereof. |
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, the personal guarantee provided by the owners of the Franchisee extends for the term of the Franchise Agreement. This means that the owners are personally responsible for ensuring the Franchisee adheres to all the terms, conditions, and covenants outlined in the agreement throughout its duration. This includes, but is not limited to, the Franchisee's obligation to make payments and fulfill every undertaking specified in the agreement.
This personal guarantee also ensures that the representations made by the Franchisee in connection with the agreement are accurate, correct, and complete. Furthermore, the owners personally agree to be bound by and liable for any breaches of the agreement's provisions, including specific sections related to various aspects of the franchise operation. This liability extends to sections covering topics such as obligations upon termination or expiration, and other key operational and compliance requirements.
For a prospective Checkers franchisee, this signifies a substantial commitment from the owners, as their personal assets are at risk if the franchise fails to meet its obligations. It is crucial for the owners to fully understand the terms of the Franchise Agreement and the potential liabilities they are undertaking. This is a common practice in franchising, as it provides the franchisor with an additional layer of security and assurance that the franchisee will operate the business responsibly and in accordance with the franchise agreement.