Does Checkers' parent company or affiliates guarantee the performance of the franchise agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchise "Checkers" and "Rally's"-branded restaurants, which feature a limited menu of hamburgers, cheeseburgers, hot dogs and/or such other menu items as we may authorize at any time and from time to time. We have developed and own a comprehensive System (defined below in Section 1.04) for developing and operating Restaurants.
- 1.02 Your Acknowledgments. You have read this Agreement and our Franchise Disclosure Document. You understand the terms of this Agreement and accept them as being reasonably necessary to maintain the uniformity of our high quality standards at all Restaurants in order to protect the goodwill of the Marks and the integrity of the System. You have conducted an independent investigation of the business contemplated by this Agreement and recognize that the restaurant industry is highly competitive, with constantly changing market conditions. You recognize that the nature of Restaurants may change over time, that an investment in a Restaurant involves business risks and that the success of the venture is largely dependent on your own business abilities, efforts and financial resources. You have not received or relied on: (a) any guaranty or assurance, express or implied, as to the revenues, profits or success of the business venture contemplated by this Agreement; or (b) any promises that any parent company or Affiliate will back us up financially or otherwise guarantee our performance.
- 1.03 Your Representations. You, and your Owners, if applicable, represent and warrant to us, that: (a) neither you nor any of your Owners has made any untrue statement of any material fact or has omitted to state any material fact in obtaining the rights granted hereunder; (b) neither you nor any of your Owners has any direct or indirect legal or beneficial interest in any business that may be deemed a
Competitive Business, except as otherwise completely and accurately disclosed in your franchise application submitted to us; and (c) the execution and performance of this Agreement will not violate any other agreement to which you or of any of your Owners may be bound. You recognize that we have approved your franchise application in reliance on all of the statements you and your Owners have made in connection therewith.
1.04 Certain Definitions. The terms listed below have the meanings which follow them and include the plural as well as the singular. Other terms are defined elsewhere in this Agreement in the context in which they arise.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, franchisees acknowledge that they have not received or relied on any promises that any parent company or affiliate will back Checkers financially or otherwise guarantee their performance. This means that the franchisee is solely responsible for the financial obligations and performance required by the franchise agreement, and cannot depend on any guarantees from Checkers' parent company or affiliates. This lack of guarantee underscores the importance of the franchisee's own business abilities, efforts, and financial resources for the success of the venture.
This acknowledgment is a standard clause in franchise agreements, intended to ensure that franchisees understand the risks involved and do not enter the agreement based on any perceived guarantees from related entities. Prospective franchisees should carefully evaluate their own capabilities and resources, and conduct thorough due diligence, rather than relying on any implied support from Checkers' parent company or affiliates.
However, the FDD also includes a passage regarding the owners of an interest in the franchisee guaranteeing the obligations of the franchisee. Specifically, the owners of the franchisee agree to personally guarantee the franchisee's performance under the agreement. This guarantee extends to the franchisee's payment and performance of all undertakings, agreements, and covenants outlined in the franchise agreement. This means that the individual owners are personally liable for the franchisee's obligations, including financial and operational responsibilities, as detailed in specific sections of the agreement.