Under what circumstance regarding bankruptcy might the termination provision in the Checkers Franchise Agreement and Development Agreement not be enforceable?

According to Checkers' 2025 Franchise Disclosure Document, the termination provisions within both the Franchise Agreement and the Development Agreement may not be enforceable under specific circumstances related to federal bankruptcy law.

Specifically, the FDD states that if a franchisee declares bankruptcy, the standard termination clause in the Checkers agreements might not be automatically enforced. This is because federal bankruptcy law, specifically 11 U.S.C.A. Sec. 101 et seq., could supersede the contractual terms agreed upon in the Franchise Agreement and Development Agreement.

This addendum serves as a disclosure to potential franchisees, informing them that while Checkers' standard agreements allow for termination upon bankruptcy, such provisions are subject to federal law and judicial interpretation in bankruptcy proceedings. Prospective franchisees should consult with legal counsel to fully understand their rights and obligations in the event of financial distress and potential bankruptcy filings.