How many Checkers restaurants must a franchisee have opened and be operating to be eligible to transfer Development Rights?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
shall furnish to us copies of all executed Nondisclosure and Non-Competition Agreements within ten (10) days following their execution.
7. AREA FRANCHISEE'S RIGHT TO TRANSFER.
- 7.01 Franchisor's Approval. Your rights and duties under this Agreement are personal to you and if you are a business corporation, partnership, limited liability company or any other legal entity, your Owners. Accordingly, neither you nor any of your Owners may Transfer the Development Rights without our prior approval and without complying with the terms and conditions of Section 7. Any transfer without such approval or compliance constitutes a breach of this Agreement and is void and of no force or effect.
- 7.02 Conditions for Approval. If we have not exercised our right of first refusal under Section 7.06, we will not unreasonably withhold our approval of a Transfer of the Development Rights that meets all of the reasonable restrictions, requirements and conditions we impose on the transfer, the transferor(s) and/or the transferee(s), including the following:
- (a) You and your Owners and Affiliates must be in compliance with the provisions of this Agreement and all Franchise Agreements executed pursuant hereto;
- (b) at the time of the proposed Transfer, you have opened and continue to operate at least one (1) Restaurant;
- (c) the proposed transferee and its owners (if the proposed transferee is a corporation, partnership, limited liability company or other legal entity) must provide us on a timely basis all information we request, and must be individuals acting in their individual capacities who are of good character and reputation, who must have sufficient business and development experience, aptitude and financial resources to develop Restaurants pursuant to this Agreement, and who must otherwise meet our approval;
- (d) the proposed transferee may not be an entity, or be affiliated with an entity, that is required to comply with the reporting and information requirements of the Securit
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, a franchisee seeking to transfer Development Rights must have opened and continue to operate at least one Checkers restaurant at the time of the proposed transfer. This is one of several conditions that Checkers imposes on the transfer, the transferor, and the transferee.
Other conditions include compliance with the Development Agreement and all Franchise Agreements, as well as the transferee meeting Checkers's approval regarding character, business and development experience, aptitude, and financial resources. The transferee must also agree to be bound by all provisions of the Development Agreement for the remainder of its term and acquire all rights under franchise agreements executed by the transferor. A transfer fee of $20,000 is also required.
These conditions ensure that any transfer of development rights is to a qualified party who will continue to uphold the Checkers brand standards and meet the obligations of the Development Agreement. The approval of a transfer does not represent any guarantee of success for the transferee, nor does it release the transferor from potential liabilities.
It is important to note that these transfer conditions do not apply to transfers among current owners or to immediate family members of current owners. These special transfers are subject to different requirements, as outlined in Section 7.04 of the Development Agreement.