Under what condition can Checkers disapprove the transfer of a Checkers franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (j) we must not have disapproved the material terms and conditions of such transfer (including the price and terms of payment) on the basis that they are
so burdensome as to be likely, in our judgment, to adversely affect the transferee's operation of the Franchised Restaurant or its compliance with its franchise agreements and any development agreements;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Checkers can disapprove a franchise transfer if the terms and conditions of the transfer, including the price and payment terms, are so burdensome that they are likely to negatively impact the transferee's ability to operate the franchised restaurant or comply with the franchise agreements and any development agreements.
This provision protects Checkers by ensuring that the new franchisee is set up for success and can meet their financial and operational obligations. If the transfer terms place an undue burden on the transferee, it could lead to poor performance, brand damage, and ultimately, a higher risk of failure.
For a prospective Checkers franchisee, this means that the franchisor has a vested interest in the financial health and operational capabilities of any potential transferee. It also implies that Checkers can scrutinize the financial arrangements of the transfer to ensure they are reasonable and sustainable for the new franchisee.
It is important for franchisees looking to transfer their franchise to ensure that the terms of the transfer are fair and do not impose excessive financial strain on the buyer. This may involve negotiating a reasonable price and payment plan to avoid potential disapproval from Checkers.