Does the Checkers franchise agreement specify that the Area Franchisee must pay all actual, consequential, special, and incidental damages?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
e prior notice, the "good cause" standard and/or the other action required by such law shall be substituted for the comparable provisions hereof.
10.02 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 10 days' prior written notice. You and we shall not be deemed to have waived any right reserved by this Agreement or be deemed to have modified this Agreement by virtue of any custom or practice of the parties at variance with it.
10.03 Exercise of Rights of Parties. The rights of Franchisor and Area Franchisee hereunder are cumulative and no exercise or enforcement by Franchisor or Area Franchisee of any right or remedy hereunder shall preclude the exercise or enforcement by Franchisor or Area Franchisee of any other right or remedy hereunder which Franchisor or Area Franchisee is entitled to enforce by law. If Area Franchisee commits any act of default under this Agreement for which Franchisor exercises its right to terminate this Agreement, Area Franchisee shall pay to Franchisor all actual, consequential, special and incidental damages Franchisor incurs as a result of the premature termination of this Agreement regardless of whether or not such damages are reasonably foreseeable. Area Franchisee acknowledges and agrees that the proximate cause of such damages sustained by Franchisor is Area Franchisee's act of default and not Franchisor's exercise of its right to terminate. Notwithstanding the foregoing, and except as otherwise prohibited or limited by applicable law, any failure, neglect, or delay of a party to assert any breach or violation of any legal or equitable right arising from or in connection with this Agreement, shall constitute a waiver of such right and shall preclude the exercise or enforcement of any legal or equitable remedy arising therefrom, unless written notice specifying such breach or violation is provided to the other party within 12 months after the later of: (a) the date of such breach or violation; or (b) the date of discovery of the facts (or the date the facts could have been discovered, using reasonable diligence) giving rise to such breach or violation.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the Area Franchisee may be liable for certain damages under specific conditions. If the Area Franchisee defaults on the agreement and Checkers terminates the agreement as a result, the Area Franchisee must pay Checkers all actual, consequential, special, and incidental damages that Checkers incurs due to the early termination, regardless of foreseeability. The agreement clarifies that the Area Franchisee's default, not Checkers's termination, is the direct cause of these damages.
However, there are limitations on damages that may be pursued. Except for the Area Franchisee's obligation to indemnify Checkers for third-party claims and regarding confidential information, both Checkers and the Area Franchisee waive any right to claim punitive or exemplary damages against each other to the fullest extent permitted by law. Furthermore, the Area Franchisee waives the right to recover consequential, special, and incidental damages for any claim arising from or related to the agreement.
These provisions outline the financial responsibilities and potential liabilities of a Checkers Area Franchisee in the event of a default or termination. It also specifies conditions under which certain types of damages are waived by both parties, which is a fairly common practice in franchise agreements to limit potential financial exposure.