For Checkers franchises, what agreement must each person who is or becomes an Owner execute?
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 Checkers' 2025 Franchise Disclosure Document, each owner of an interest in the franchisee entity must personally and unconditionally guarantee the franchisee's obligations under the Franchise Agreement. This means that each owner is guaranteeing that the Checkers franchisee will punctually pay and perform every undertaking, agreement, and covenant outlined in the Franchise Agreement. They also guarantee that all representations made in connection with the agreement are true, correct, and complete.
Furthermore, each owner personally agrees to be bound by and liable for any breach of the Franchise Agreement's provisions. This includes, but is not limited to, Sections 5, 7, 8, 13, 16, and 18 (including Section 18.05). This personal guaranty ensures that Checkers has recourse directly against the owners themselves, not just the franchisee business entity, if the franchisee fails to meet its obligations.
This requirement is a common practice in franchising, as it provides an additional layer of security for the franchisor. By signing a personal guarantee, the owners are demonstrating their commitment to the success of the Checkers franchise and are incentivized to ensure that the business operates in compliance with the Franchise Agreement. Prospective franchisees should carefully review the Franchise Agreement and the personal guarantee to fully understand the obligations and potential liabilities they are assuming.