How does the Checkers Non-Traditional Site Addendum relate to the existing Franchise Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
--|---------------------------------------------------------------------------------------------|------|------|----|---------|----| | | | | | Agreement") pursuant to which Franchisee will operate a franchised "Checkers" or "Rally's" | | | | | | | | | | | dated of even date herewith (including all related exhibits and attachments, the "Franchise | | | | | | | | WHEREAS, Franchisor | | | and Franchisee are Parties to that certain Franchise Agreement | | | | | |
WHEREAS, the Parties now desire to modify the Franchise Agreement according to the terms and conditions set forth in this Addendum.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
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- Relationship to Franchise Agreement; Recitals. This Addendum shall be annexed to and form a part of the Franchise Agreement. All capitalized terms not otherwise defined in this Addendum shall have the meanings set forth in the Franchise Agreement. Except as modified by this Addendum, the Franchise Agreement remains in full force and effect. Any conflict between the provisions hereof and the Franchise Agreement shall be construed in favor of this Addendum. All references in this Addendum to "Sections," "Subsections," and/or "Exhibits" shall mean the applicable Section(s), Subsection(s), and/or Exhibit(s) of the Franchise Agreement, unless specified otherwise below. The Recitals above are incorporated into this Addendum by reference.
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- Qualifications. You represent, and in connection with signing this Addendum have provided us (or agree to provide promptly upon our request) relevant supporting documentation, that: (a) you are authorized, or will obtain due authorization, to establish and operate a Restaurant within or from the premises of a Non-Traditional Site; and (b) you will remain a franchisee in good standing, and comply with the Franchise Agreement.
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- Reduced Fee(s). The following fees are modified in the Franchise Agreement to reflect Franchisee's operation of the Restaurant from a Non-Traditional Site:
- a. **Initial
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the Non-Traditional Site Addendum modifies the existing Franchise Agreement when a franchisee operates a restaurant at a non-traditional site. The addendum is annexed to and becomes part of the Franchise Agreement, with all capitalized terms retaining the meanings defined in the original agreement unless otherwise specified in the addendum.
The Non-Traditional Site Addendum takes precedence in case of conflicts, stating that any discrepancies between its provisions and the Franchise Agreement will be resolved in favor of the addendum. This ensures that the specific terms tailored for non-traditional locations are upheld. The recitals included in the addendum are incorporated by reference, further integrating it with the Franchise Agreement.
The addendum also includes modifications to certain fees. Specifically, it revises Section 6.01 of the Franchise Agreement to reflect a $15,000 reduction in the initial franchise fee for non-traditional sites. Additionally, Section 6.02 is revised to set the royalty fee at 2% of Net Sales for these locations. These financial adjustments acknowledge the different operational characteristics and potential revenue streams of non-traditional sites compared to standard locations.
Checkers retains full rights regarding the brand, system, and restaurant operations, even with the addendum. Franchisees operating at Non-Traditional Sites do not receive territorial protection or exclusivity. Checkers and its affiliates can engage in any business activities without restrictions, and the addendum, along with the Franchise Agreement, constitutes the entire understanding between the parties, superseding any prior agreements unless amended in writing.