What is the standard of 'good cause' to terminate the Checkers Agreement if required by applicable law?

According to Checkers's 2025 Franchise Disclosure Document, if any applicable law requires a different standard of "good cause" to terminate the Franchise Agreement than what is outlined in the agreement, the standard of "good cause" required by such law will be substituted for the comparable provisions in the agreement. This means that the specific definition of "good cause" for termination can vary based on the laws of the jurisdiction in which the franchise operates.

For a prospective Checkers franchisee, this implies that the grounds for termination of the franchise agreement could be more or less lenient depending on local and state laws. Franchisees need to be aware that the FDD and franchise agreement are not the only determinants of what constitutes "good cause." They must also understand the relevant laws in their specific area.

For example, the addendum for the state of Wisconsin states that a provision permitting Checkers to terminate a franchise prior to the expiration of its term is only allowed for good cause. Good cause includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and failure to cure such after written notice and a reasonable opportunity of no more than 30 days to cure such failure.

It is important for prospective franchisees to consult with a legal professional to understand the specific laws governing franchise terminations in their state or region. This will help them to be fully aware of their rights and obligations under the franchise agreement and applicable laws.