What items are excluded from compensation if Checkers refuses to renew a franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings. Personalized materials which have no value to the franchisor and inventory, supplies, equipment, fixtures, and furnishing not reasonably required in the conduct of the franchise business are not subject to compensation. This subsection applies only if: (i) the term of the franchise is less than 5 years and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of franchisor's intent not to renew the franchise.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, if Checkers refuses to renew a franchise agreement under certain conditions, the franchisee will not be compensated for certain items. Specifically, personalized materials that have no value to Checkers are excluded from compensation.
Additionally, Checkers is not obligated to compensate the franchisee for inventory, supplies, equipment, fixtures, and furnishings that are not reasonably required for the operation of the franchise business. This means that if a franchisee has excess or unnecessary items, they will not be reimbursed for those items upon non-renewal.
These compensation rules apply only if two conditions are met: (1) the franchise term is less than 5 years, and (2) the franchisee is either prohibited from operating a similar business in the same area after the franchise expires, or the franchisee does not receive at least 6 months' advance notice of Checkers's intent not to renew the franchise. If these conditions are not met, Checkers' obligation to compensate for the fair market value of inventory, supplies, equipment, fixtures, and furnishings may change.