What happens if a Checkers franchisee or their owners/affiliates are not in compliance with all agreements with Checkers or its affiliates when attempting to transfer the franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.02 Conditions for Approval. If we have not exercised our right of first refusal under Section 13.06, we will not unreasonably withhold our approval of a transfer of the Franchise that meets all of the reasonable restrictions, requirements and conditions we impose on the transfer, the transferor(s) and/or the transferee(s), including the following:
- (a) you have completed development of the Franchised Restaurant and are operating the Franchised Restaurant in accordance with this Agreement;
- (b) you and your Owners and Affiliates are in compliance with the provisions of this Agreement and all other agreements with us or any of our Affiliates;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a franchisee's ability to transfer their franchise is contingent upon compliance with all agreements. Specifically, both the franchisee and their owners/affiliates must be in full compliance with the franchise agreement and any other agreements they have with Checkers or its affiliates.
If a Checkers franchisee or their owners/affiliates are not in compliance with all agreements, Checkers can withhold approval of the franchise transfer. This means that if there are any outstanding issues, such as failure to meet operational standards, outstanding payments, or any other breach of contract, the transfer may be blocked until these issues are resolved.
This condition protects Checkers by ensuring that franchisees offered for sale are in good standing. It also ensures that new owners will not inherit unresolved issues or liabilities. For a prospective franchisee looking to eventually sell their Checkers franchise, maintaining compliance with all agreements is crucial to ensure a smooth and successful transfer in the future.