If a Checkers franchisee is a business entity, what designation must they make in Exhibit A?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.03 Operating Partner. If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate in Exhibit A as the "Operating Partner" an individual we approve who must: (a) own and control, or have the right to own and control (subject to conditions reasonably acceptable to us) not less than ten percent (10%) of your equity and voting rights; (b) have the authority to make, and bind you and all your Owners to, all operational decisions regarding the Franchised Restaurant; and (c) complete our training program to our satisfaction before engaging in his or her operational duties. You may not change the Operating Partner without our prior written consent.
You (or your Operating Partner): (a) shall exert full-time, best efforts to the development and operation of the Franchised Restaurant and all other Restaurants you own; and (b) may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise may conflict with your obligations hereunder.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, if the franchisee is a business entity such as a corporation, partnership, or limited liability company, they must designate an "Operating Partner" in Exhibit A.
The Operating Partner must be an individual approved by Checkers who owns or has the right to own at least 10% of the entity's equity and voting rights, subject to conditions acceptable to Checkers. This individual needs to have the authority to make operational decisions for the franchised restaurant and bind the entity and its owners to those decisions. Furthermore, the Operating Partner must complete Checkers's training program to their satisfaction before starting their operational duties.
The Operating Partner is required to exert full-time effort in the development and operation of the Checkers restaurant and any other restaurants owned by the franchisee. They are also restricted from engaging in other business activities that demand significant management responsibility or time commitments that could conflict with their obligations to Checkers. The franchisee needs to obtain Checkers's prior written consent to change the Operating Partner.