Under what circumstances must a Checkers franchisee pay attorneys' fees and other costs?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
assistance you request. |
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (See Note 1) | |-------------------------------------------------------------|-----------------------------------------------|------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Fees to Evaluate and Approve Alternative Suppliers | Currently, only out-of-pocket expenses. | Upon receipt of our bill. | We may impose reasonable inspections and supervision fees to cover our costs in evaluating alternative approved brands or suppliers you suggest. | | Extension Fee | $5,000 | As incurred. | You will pay this amount if we grant you a one-time extension to either locate, secure or develop a site acceptable to us for the Franchised Restaurant. | | Rent | Varies by site being sublet | Monthly | You will only pay this amount if we sublease the Premises of your Franchised Restaurant to you. If we sublease the Premises, you may pay rent directly to the landlord or to us. If you pay rent to us, we may charge an amount that is higher than the rent due under the underlying lease. | | Audit | Cost of audit | Upon receipt of our bill. | Payable only if you fail to furnish required information or if we find an understatement of Net Sales greater than 2%. | | Insurance | Varies, cost of coverage obtained | As incurred | If you fail to obtain the required insurance coverage for the Franchised Restaurant, we may obtain such coverage at your expense. | | Maintenance Costs | Varies, actual costs | As incurred | If you fail or refuse to maintain the Franchised Restaurant as required, we have the right to do so on your behalf and at your expense. |
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (See Note 1)
Source: Item 6 — OTHER FEES (FDD pages 21–30)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a franchisee may be required to pay attorneys' fees and other costs under specific circumstances related to both the Franchise Agreement and the Development Agreement. If a franchisee fails to comply with the Franchise Agreement or if Checkers is involved in a lawsuit due to the franchisee's restaurant operations, the franchisee is responsible for covering the attorneys' fees and other costs incurred. These fees vary and are based on the actual costs incurred.
Similarly, if a franchisee has a Development Agreement with Checkers, they may also be responsible for attorneys' fees and other costs if they fail to comply with the Development Agreement. Again, the fees are variable and based on actual costs. This means that franchisees need to ensure they adhere to the terms of both the Franchise Agreement and any Development Agreements to avoid incurring these potentially significant costs.
These stipulations are fairly standard in franchising, as franchisors seek to protect themselves from legal liabilities arising from franchisee actions. Prospective Checkers franchisees should carefully review the Franchise Agreement and any Development Agreements with their own legal counsel to fully understand their obligations and the potential financial implications of non-compliance or legal disputes.