What happens if a Checkers franchisee is convicted of a felony that may affect the goodwill of the marks?

According to the 2025 Checkers Franchise Disclosure Document, if a franchisee is convicted of, or pleads no contest to, a felony or other crime or offense that Checkers reasonably believes may adversely affect the goodwill associated with its Marks, it constitutes an event of default under the Franchise Agreement.

This means Checkers has grounds to terminate the franchise agreement. The determination of whether the felony or crime adversely affects the goodwill associated with the Marks rests with Checkers, giving them considerable discretion in deciding whether to terminate the agreement. This clause highlights the importance of maintaining a clean criminal record and avoiding any actions that could damage the brand's reputation.

For a prospective Checkers franchisee, this underscores the need to operate with integrity and avoid any criminal behavior. The franchisee's actions, even outside the direct operation of the restaurant, could have serious repercussions for their franchise ownership. Franchisees should seek legal counsel if they are unsure whether certain conduct could trigger this clause.