After Checkers provides an Appraisal Notice, what are the franchisee's obligations regarding the personal property of the Checkers Franchised Restaurant?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Upon termination or expiration (without renewal) of this Agreement, we have the right, exercisable by giving notice thereof ("Appraisal Notice") within ten (10) days after the date of such termination or expiration, to require that a determination be made of the "Agreed Value" (as defined below) of all the personal property used in the Franchised Restaurant which you own, including inventory of non-perishable products, materials, supplies, furniture, equipment, signs, but excluding any cash and short-term investments and any items not meeting our specifications for Restaurants (the "Purchased Assets"). At any time following our providing you an Appraisal Notice, we shall have the unrestricted right to assign this option to purchase separate and apart from the remainder of this Agreement, including, without limitation, to another third-party franchisee. Upon such notice, you may not sell or remove any of the personal property of the Franchised Restaurant from the Premises and must give us (or our assignee), our (or our assignee's) designated agents and the "Appraiser" (as defined below) full access to the Franchised Restaurant and all of your books and records at any time during customary business hours in order to conduct inventories and determine the purchase price for the Purchased Assets.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, after Checkers provides an Appraisal Notice, the franchisee has specific obligations regarding the personal property of the franchised restaurant. The franchisee cannot sell or remove any of the personal property from the premises. This restriction ensures that the assets remain available for potential purchase by Checkers or its assignee.
Additionally, the franchisee must provide Checkers (or its assignee), their designated agents, and the Appraiser full access to the restaurant and all books and records during customary business hours. This access is necessary for conducting inventories and determining the purchase price for the Purchased Assets. The Purchased Assets include all personal property used in the restaurant, such as inventory of non-perishable items, materials, supplies, furniture, equipment, and signs, but exclude cash, short-term investments, and items not meeting Checkers' specifications.
These obligations are triggered upon the termination or expiration (without renewal) of the Franchise Agreement, when Checkers exercises its right to purchase the restaurant's assets. The Appraisal Notice is Checkers' method of initiating the process to determine the Agreed Value of these assets. Compliance with these requirements is essential for a smooth transition and to fulfill the franchisee's contractual obligations upon exiting the Checkers system.