What is the minimum term length required for the lease that Checkers may require a franchisee to execute for the Restaurant Location after termination or expiration?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Upon termination of this Agreement (for any reason, no reason, or upon expiration without renewal), if you or any of your Owners or Affiliates directly or indirectly owns the building and/or land (the "Real Estate") on which the Franchised Restaurant is located, we may, and at our option (in our sole discretion) and in conjunction with our purchase of the Franchised Restaurant pursuant to Section 16.04 hereof, require you to execute and deliver to us or our designee a lease for the Restaurant Location pursuant to the terms of Section 16.05(b).
- (b) If we elect to require you to execute and deliver to us or our designee a lease for the Restaurant Location, we shall deliver written notice to you within ten (10) days after the effective date of termination or expiration of this Agreement of such election. Following such notice, you and we shall negotiate in good faith a lease for the Real Estate containing commercially reasonable terms with a term equal to a minimum of the remaining Term under this Agreement. If you and we have not agreed to a lease within thirty (30) days after your receipt of our election, we shall engage a Real Estate Appraiser to prepare a lease with commercially reasonable terms. The Real Estate Appraiser's determination will be binding, and you must
execute and deliver to us a lease for the Restaurant Location containing the commercially reasonable terms provided by the Real Estate Appraiser. All fees, compensation and cost and expense reimbursements of the Real Estate Appraiser shall be borne equally by the parties. Upon your execution of the lease for the Restaurant Location, you agree to vacate the Restaurant Location promptly and completely, rendering all necessary assistance to us to enable us to take prompt possession.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if a franchisee or their affiliates owns the real estate where the franchised restaurant is located, Checkers has the option to require the franchisee to execute a lease for the restaurant location if the franchise agreement is terminated or expires. Checkers must provide written notice of this election within ten days of the termination or expiration date.
The franchisee and Checkers are then required to negotiate a lease in good faith with commercially reasonable terms. The minimum term for this lease must be equal to the remaining term of the original franchise agreement.
If an agreement cannot be reached within 30 days of the election notice, a Real Estate Appraiser will be engaged to prepare a lease with commercially reasonable terms, which will be binding on both parties. The costs associated with the appraiser will be split equally between Checkers and the franchisee. After executing the lease, the franchisee must promptly vacate the premises and provide assistance to Checkers for taking possession.