Must a Checkers franchisee be in compliance with all Franchise Agreements to transfer Development Rights?

According to Checkers's 2025 Franchise Disclosure Document, a franchisee must be in compliance with all existing Franchise Agreements to transfer Development Rights. Specifically, if Checkers has not already exercised its right of first refusal, they will not unreasonably withhold approval of a Development Rights transfer if the franchisee, their owners, and affiliates are in compliance with the provisions of the Area Franchise Agreement and all Franchise Agreements executed under it.

This condition ensures that potential transferees are taking over a business in good standing. It protects Checkers's brand and reputation by ensuring that Development Rights are only transferred to responsible parties who have adhered to the terms of their agreements.

For a prospective Checkers franchisee, this means maintaining compliance with all agreements is crucial not only for the ongoing operation of the franchise but also for any future plans to transfer Development Rights. Failure to comply with the terms of the agreements could prevent the franchisee from transferring their rights, potentially impacting their investment and exit strategy. This requirement is a standard practice in franchising, as franchisors typically want to ensure that any transfer of rights maintains the integrity and standards of the franchise system.