Does the Checkers franchise agreement specify that damages are paid regardless of whether or not such damages are reasonably foreseeable?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, the Area Franchisee may be liable for damages regardless of foreseeability. Specifically, if the Area Franchisee defaults on the agreement and Checkers terminates the agreement as a result, the Area Franchisee must pay Checkers for all actual, consequential, special, and incidental damages incurred due to the early termination. This obligation to pay damages applies whether or not the damages were reasonably foreseeable.
This clause means that a Checkers franchisee could be responsible for a broad range of damages, even those that might be considered unusual or unexpected. The FDD clarifies that Checkers believes the franchisee's default, not Checkers's termination, is the direct cause of these damages.
However, the agreement also includes a clause that Franchisor and Franchisee each waive, to the fullest extent permitted by law, any right to or claim for any punitive or exemplary damages against the other, except with respect to the obligation to indemnify for third party claims and confidential information. Franchisee also waives the right to recover consequential, special, and incidental damages for any claim arising from the agreement.