Does Checkers have the right to assign its option to purchase the Franchised Restaurant assets to another party?
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, Checkers has the unrestricted right to assign its option to purchase the Franchised Restaurant assets to another third-party franchisee. This right is separate from the remainder of the Franchise Agreement. This assignment can occur at any time after Checkers provides an Appraisal Notice to the franchisee.
This means that if Checkers decides to terminate or not renew a franchise agreement, it can choose to have the personal property of the restaurant appraised and then either purchase those assets itself or assign that right to another franchisee or third party. The franchisee is obligated to provide access to the restaurant and its records for inventory and valuation purposes once an Appraisal Notice has been given.
For a prospective franchisee, this clause indicates that upon termination or expiration of their franchise agreement, Checkers has the power to decide who will purchase the restaurant's assets, potentially impacting the financial outcome for the exiting franchisee. The franchisee cannot sell or remove any personal property from the premises once the Appraisal Notice is given, ensuring the assets remain available for purchase by Checkers or its assignee.