Does the Illinois Rider to the Development Agreement for Checkers affect the arbitration provision?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
nt, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a
material inducement to a franchisee's investment. This provision supersedes any other or inconsistent term of any document executed in connection with the franchise.
[SIGNATURES ON FOLLOWING PAGE]
CHECKERS DRIVE-IN RESTAURANTS, INC. A Delaware Corporation
ILLINOIS RIDER TO THE DEVELOPMENT AGREEMENT
In recognition of the requirements of the Illinois Franchise Disclosure Act and the rules and regulations promulgated thereunder, the Development Agreement shall be modified by this document (the "Rider") as follows:
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- Background. Franchisor and Area Franchisee are parties to that certain Development Agreement dated , ("Agreement") that has been entered into concurrently with the entering of this Rider. This Rider is annexed to and forms part of the Agreement. This Rider is being executed because the Restaurant(s) to be developed by Area Franchisee pursuant to the Agreement will be located in the state of Illinois and/or because Area Franchisee is a resident of the state of Illinois. This Rider shall be of no force and effect unless the jurisdictional requirements of the Illinois Franchise Disclosure Act and any regulations thereunder are met independently without reference to this Rider.
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- Development Fee. Section 2.01 of the Agreement shall be amended by adding the following:
Despite the payment provisions above, Franchisor will defer collection of all initial fees owed by Area Franchisee to Franchisor under this Agreement until Franchisor has completed all of its pre-opening obligations under the first franchise agreement entered into pursuant to this Agreement and Area Franchisee has commenced doing business under the first franchise agreement. This deferral requirement has been imposed by the Illinois Attorney General's Office based on the Franchisor's financial condition.
- Arbitration; Jurisdiction and Venue.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the Illinois Rider to the Development Agreement does impact the arbitration, jurisdiction, and venue provisions. Specifically, Section 3 of the Illinois Rider to the Development Agreement amends Sections 10.06 and 10.07 of the Development Agreement. It stipulates that any legal action between Checkers and the Area Franchisee must be initiated in a state or federal court located in Illinois, overriding any conflicting provision in the original agreement.
This modification ensures that disputes arising under the Development Agreement for Checkers franchises in Illinois will be resolved within the Illinois court system. This could be more favorable for franchisees residing or operating in Illinois, as it provides a local venue for resolving disputes, potentially reducing travel costs and making it easier to secure local legal representation.
Additionally, Section 5 of the Illinois Rider to the Franchise Agreement states that any condition that would waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void. This protects the franchisee's rights under Illinois law, preventing Checkers from enforcing terms that might otherwise limit those rights. Similarly, Section 6 ensures that no disclaimer signed by the franchisee can waive claims of fraud or reliance on information provided by Checkers, reinforcing protections against misleading information during the franchise sales process.
These provisions collectively strengthen the legal protections for Checkers franchisees in Illinois, ensuring that they have access to local courts, are protected by Illinois law, and cannot inadvertently waive their rights through disclaimers or other contractual clauses.