If a Checkers franchisee's Development Agreement is terminated solely due to failure to meet the development schedule, does this automatically terminate the franchise agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, if you are operating under a Development Agreement that terminates solely as a result of your failure to comply with the development schedule set forth in that agreement, then such termination of the Development Agreement will not result in a termination (constructive or otherwise) of this Agreement if you have
fully performed and otherwise been in compliance with all of your obligations under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the termination of a Development Agreement due to failure to comply with the development schedule does not automatically result in the termination of the Franchise Agreement. However, this is conditional.
Specifically, the Franchise Agreement remains in effect only if the franchisee has fully performed and otherwise complied with all obligations under the Franchise Agreement itself. This means that even if a Checkers franchisee fails to meet the development schedule outlined in the Development Agreement, their existing restaurant franchise can continue operating, provided they are meeting all other requirements of the Franchise Agreement.
This provision protects franchisees who may face unforeseen delays in their development schedule but are otherwise fulfilling their obligations to Checkers. It is important for prospective franchisees to understand all the terms and conditions of both the Development Agreement and the Franchise Agreement to ensure they are in compliance with both, and to be aware of the potential consequences of failing to meet the development schedule.