If a Checkers franchisee fails to meet the Development Schedule, can the agreement be terminated?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
|---|---|---| | grant the right to operate, any "Checkers" or “Rally’s”-branded restaurants located within the | | | | | | | Development Area, | except for: | (1) franchises granted | pursuant to this | Agreement; | (2) |
EXHIBIT A TO THE RESTAURANT DEVELOPMENT AGREEMENT
| 7.04 | Special Transfers. | Neither Section | 7.06 | nor Section 7.2(f) apply to any | |---|---|---|---|---| by which the Restaurant must be opened; and (ii) the amount of initial franchise fee, if those
timelines are met.
| on , under the laws of the State of . It has not conducted | | | |---|---|---| | business under any name other than its partnership name. The following is a list of all of Area | | | | Franchisee’s general partners as of | , | . | If (i) you fail to meet any of the timelines listed in the chart of Section 3(b), (ii) you fail to maintain Property Control after the Property Control Date, or (iii) you or any of your affiliates are in breach of any term or condition under this Agreement or any other agreements with us, the initial franchise fee for that particular Restaurant as well as all subsequent Restaurants to be developed hereunder will, without notice to you automatically readjust to the standard amount of $30,000 (regardless of the initial franchise fee amount listed in the Section 3(b) chart).
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, failure to comply with any provision of the agreement, including meeting development timelines, can result in termination. Specifically, if a Checkers franchisee fails to meet the timelines listed in Section 3(b), it constitutes a breach of the agreement.
In the event of such a breach, Checkers has the right to terminate the Franchise Agreement. Additionally, a failure to meet development timelines results in the initial franchise fee for the restaurant, as well as all subsequent restaurants to be developed, automatically readjusting to the standard amount of $30,000, regardless of any initial franchise fee reduction listed in Section 3(b).
Furthermore, the FDD states that any default or breach by the franchisee of any other agreement with Checkers will be considered an event of default under the Franchise Agreement. If the nature of the default under any other agreement would have been considered an event of default under the Franchise Agreement, then Checkers will have the right to terminate all other agreements between Checkers and the franchisee in accordance with the termination provisions of the Franchise Agreement.