If Checkers assigns its purchase option, what access rights must the franchisee grant to Checkers' assignee?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Upon termination or expiration (without renewal) of this Agreement, we have the right, exercisable by giving notice thereof ("Appraisal Notice") within ten (10) days after the date of such termination or expiration, to require that a determination be made of the "Agreed Value" (as defined below) of all the personal property used in the Franchised Restaurant which you own, including inventory of non-perishable products, materials, supplies, furniture, equipment, signs, but excluding any cash and short-term investments and any items not meeting our specifications for Restaurants (the "Purchased Assets"). At any time following our providing you an Appraisal Notice, we shall have the unrestricted right to assign this option to purchase separate and apart from the remainder of this Agreement, including, without limitation, to another third-party franchisee. Upon such notice, you may not sell or remove any of the personal property of the Franchised Restaurant from the Premises and must give us (or our assignee), our (or our assignee's) designated agents and the "Appraiser" (as defined below) full access to the Franchised Restaurant and all of your books and records at any time during customary business hours in order to conduct inventories and determine the purchase price for the Purchased Assets.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if Checkers exercises its option to purchase the franchisee's restaurant assets upon termination or expiration of the franchise agreement and subsequently assigns this purchase option to a third party, the franchisee must grant specific access rights to Checkers' assignee.
Specifically, the franchisee must allow Checkers (or its assignee), their designated agents, and the appraiser full access to the franchised restaurant premises and all of the franchisee's books and records. This access is granted at any time during customary business hours. The purpose of this access is to conduct inventories and determine the purchase price for the Purchased Assets. The franchisee is also restricted from selling or removing any personal property of the Franchised Restaurant from the Premises once an Appraisal Notice has been issued.
This provision ensures that Checkers or its assignee can accurately assess the value of the assets they are considering purchasing and facilitates a smooth transition of ownership if the purchase option is exercised. It is a standard practice in franchising to include such clauses to protect the franchisor's interests and ensure compliance with the terms of the franchise agreement upon termination or expiration.