Does Checkers have a right of first refusal to purchase the assets of a franchise on the same terms as a third party?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c).
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the franchisor has a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party. This right is applicable if a franchisee decides to sell their franchise assets to someone else.
This means that if a Checkers franchisee receives a legitimate offer from a third party to buy their franchise assets, they must first offer Checkers the opportunity to buy those assets under the same terms. Checkers can then decide whether to match the offer and purchase the assets themselves.
This provision ensures that Checkers has some control over who enters the system and protects the brand. It also ensures that Checkers can acquire existing locations if they deem it beneficial for the overall network. However, in the state of California, this right of first refusal does not apply to a transfer to the franchisee's spouse, child, or other relative, unless it would adversely affect the franchise or Checkers' system.