Does a Checkers franchisee have the right to renew or extend their franchise term?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| a. | Length of the franchise term | Section 2.01 | Mutually agreed upon |
| b. | Renewal or extension of the term | Section 2.01 | No renewal |
| c. | Requirements for developer to renew or extend | Section 2.01 | You have no right to renew or extend your rights under this Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, franchisees do not have the right to renew or extend their franchise term. The length of the franchise term is mutually agreed upon, but there is no provision for renewal or extension. This is detailed in Section 2.01 of the franchise agreement.
This lack of a renewal option means that at the end of the franchise term, Checkers is under no obligation to allow the franchisee to continue operating under the Checkers brand. The franchisee will need to negotiate a new agreement if they wish to continue operating the restaurant. This could potentially lead to a loss of the business if an agreement cannot be reached, or less favorable terms if Checkers chooses to offer a new agreement but on different terms.
In the event that Checkers does not offer a renewal, they have the option to purchase the franchisee's restaurant at fair market value upon expiration of the franchise term. Additionally, the franchisee is subject to non-competition covenants, which prevent them from engaging in any competing business for two years at the premises of their former Checkers restaurant, or within 3 miles of that restaurant or any other Checkers or Rally's location. This further limits the franchisee's options after the franchise term ends.
It is important for prospective franchisees to consider the implications of not having a renewal option. This is not uncommon in the franchise industry, but it does place the franchisee in a position where their long-term business prospects are dependent on the franchisor's willingness to extend the relationship. Franchisees should carefully evaluate the potential risks and rewards before investing in a Checkers franchise.