What is the significance of 'time is of the essence' in the Checkers Development Rights Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
2.03 Development Obligations. You agree to exert your best efforts to fully develop the market potential for Restaurants in the Development Area. Without limiting the foregoing, you agree to open and operate in the Development Area, in accordance with and pursuant to Franchise Agreements, those cumulative numbers of Restaurants set forth in Section 3(a) of Exhibit A by the corresponding dates set forth therein and to achieve those cumulative numbers in accordance with the timelines set forth in Section 3(b) of Exhibit A (those dates and timelines collectively referred to herein as the "Development Schedule"). Time is of the essence in this Agreement, and we have no obligation under any circumstances to extend any of the dates or timelines in the Development Schedule.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the phrase 'time is of the essence' in the Development Rights Agreement emphasizes the critical importance of adhering to the Development Schedule. This schedule, detailed in Section 3 of Exhibit A, outlines the dates and timelines by which a franchisee must open and operate a specific number of Checkers restaurants within their designated Development Area.
For a prospective Checkers franchisee, this means that failure to meet the deadlines outlined in the Development Schedule can have significant consequences. Checkers is under no obligation to extend any dates or timelines, so franchisees must be prepared to meet the development obligations as agreed upon. This clause protects Checkers by ensuring that franchisees actively develop their territories according to the agreed-upon plan, preventing delays that could hinder the brand's growth and market penetration.
The inclusion of 'time is of the essence' is a common practice in franchise agreements where development schedules are involved. It underscores the franchisor's commitment to expansion and the franchisee's responsibility to execute the development plan diligently. Franchisees should carefully review the Development Schedule and assess their ability to meet the required timelines before entering into the agreement. They should also consider potential challenges such as securing real estate, obtaining permits, and managing construction, and factor these into their development plans to avoid falling behind schedule.