Under what condition can the Checkers franchisor make an assignment of the Franchise Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Landlord agrees that, if Franchisor succeeds to Tenant's and/or any other lessee's interests under the Lease for any reason, Franchisor shall have the right to further assign the lease or to sublease the Premises to either an entity owned or controlled by Franchisor, or to another [Checkers] franchisee upon obtaining Landlord's written consent, which consent may not be unreasonably withheld, conditioned or delayed by Landlord.
No assignment permitted under this Section is subject to any assignment or similar fee or will cause any rental acceleration.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, in the event that Checkers succeeds to the Tenant's (Franchisee's) interests under the Lease for any reason, Checkers has the right to further assign the lease or sublease the premises. This assignment or sublease can be made to an entity owned or controlled by Checkers, or to another Checkers franchisee. However, this is contingent upon obtaining the Landlord's written consent, which, according to the FDD, cannot be unreasonably withheld, conditioned, or delayed by the Landlord.
This clause ensures that Checkers retains flexibility in managing the restaurant location should the original franchisee default or the franchise agreement terminate. It allows Checkers to maintain operations by transferring the lease to a new operator, either an affiliated entity or another franchisee, subject to the landlord's approval.
It is also specified that no assignment fee can be charged for this assignment, nor can the rent be accelerated as a result of the assignment. This provision protects Checkers from incurring additional costs or penalties when transferring the lease under these circumstances. This addendum to lease agreement protects the franchisor and its interests in the event of franchisee default.