What is the requirement for a Checkers franchisee regarding the designation of an Operating Partner in Exhibit A if the franchisee is a business entity?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.03 Operating Partner. If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate in Exhibit A as the "Operating Partner" an individual we approve who must: (a) own and control, or have the right to own and control (subject to conditions reasonably acceptable to us) not less than ten percent (10%) of your equity and voting rights; (b) have the authority to make, and bind you and all your Owners to, all operational decisions regarding the Franchised Restaurant; and (c) complete our training program to our satisfaction before engaging in his or her operational duties. You may not change the Operating Partner without our prior written consent.
You (or your Operating Partner): (a) shall exert full-time, best efforts to the development and operation of the Franchised Restaurant and all other Restaurants you own; and (b) may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise may conflict with your obligations hereunder.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if a franchisee is a business entity, such as a corporation, partnership, or limited liability company, they must designate an Operating Partner in Exhibit A. This Operating Partner must be an individual approved by Checkers who meets specific criteria.
The designated Operating Partner must own and control, or have the right to own and control, at least 10% of the franchisee's equity and voting rights, subject to conditions reasonably acceptable to Checkers. This ensures the Operating Partner has a significant stake in the business. The Operating Partner must also have the authority to make and bind the franchisee and all its owners to all operational decisions regarding the franchised restaurant. This provision ensures that the Operating Partner has the necessary power to manage the restaurant effectively.
Furthermore, the Operating Partner is required to complete Checkers' training program to their satisfaction before engaging in operational duties. This ensures that the Operating Partner is properly trained in the Checkers system and standards. The franchisee cannot change the Operating Partner without Checkers' prior written consent, giving Checkers control over who is managing their franchised locations. The Operating Partner (or the franchisee if there is no Operating Partner) must exert full-time, best efforts to the development and operation of the franchised restaurant and all other Checkers restaurants they own, and may not engage in any other business or activity that requires substantial management responsibility or time commitments or otherwise may conflict with their obligations under the Franchise Agreement.