What section of the Checkers Franchise Agreement outlines the transfer conditions related to ownership changes?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
13. FRANCHISEE'S RIGHT TO TRANSFER.
- 13.01 Franchisor's Approval. The rights and duties created by this Agreement are personal to you or, if you are a business corporation, partnership, limited liability company or other legal entity, your Owners. Accordingly, neither you nor any of your Owners may transfer the Franchise without our approval and without complying with all of the provisions of Section 13. Any transfer without such approval or compliance constitutes a breach of this Agreement and is void and of no force or effect.
- 13.02 Conditions for Approval. If we have not exercised our right of first refusal under Section 13.06, we will not unreasonably withhold our approval of a transfer of the Franchise that meets all of the reasonable restrictions, requirements and conditions we impose on the transfer, the transferor(s) and/or the transferee(s), including the following:
- (a) you have completed development of the Franchised Restaurant and are operating the Franchised Restaurant in accordance with this Agreement;
- (b) you and your Owners and Affiliates are in compliance with the provisions of this Agreement and all other agreements with us or any of our Affiliates;
- (c) the proposed transferee, or its Owners (if the proposed transferee is a legal entity), must provide us on a timely basis all information we request, must be individuals acting in their individual capacities who are of good character and reputation, who must have sufficient business experience, aptitude and financial resources to operate the Franchised Restaurant, and who must otherwise meet our approval;
- (d) the proposed transferee may not be an entity, or be affiliated with an entity, that is required to comply with reporting and information requirements of the Securities Exchange Act of 1934, as amended;
- (e) the transferee (or its operating partner) and its operators must have completed our initial training program to our satisfaction;
- (f) the transferee (and its owners) must agree to be bound by all of the provisions of this Agreement for the remainder of its term or, at our option, execute our then current standard form of franchise agreement and related documents used in the state in which the Franchised Restaurant is located (which
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Section 13 of the Franchise Agreement, titled "FRANCHISEE'S RIGHT TO TRANSFER," details the conditions and requirements for transferring the franchise. This section covers various aspects of the transfer process, including obtaining Checkers' approval and complying with specific provisions.
Specifically, Section 13.01 states that the rights and duties within the agreement are personal to the franchisee or their owners. Therefore, any transfer of the franchise requires Checkers' approval and adherence to all provisions outlined in Section 13. Failure to obtain approval or comply with these provisions constitutes a breach of the agreement and renders the transfer void.
Section 13.02 outlines the conditions for approval, stating that Checkers will not unreasonably withhold approval of a transfer that meets its reasonable restrictions, requirements, and conditions. These conditions include the franchisee operating the restaurant in compliance with the agreement, the proposed transferee providing all requested information, and the transferee completing the initial training program. The transferee must also agree to be bound by the provisions of the agreement for the remainder of its term or execute Checkers' then-current standard form of franchise agreement.