Under what condition does the Landlord agree that the expiration or termination of the Checkers Franchise Agreement constitutes a default under the Lease?

According to Checkers' 2025 Franchise Disclosure Document, the Landlord agrees that the expiration or termination of the Franchise Agreement constitutes a default under the Lease under specific conditions. Specifically, the expiration of the Franchise Agreement, unless the Tenant (the franchisee) enters into a renewal Franchise Agreement with Checkers, will be considered a default. Similarly, a termination of the Franchise Agreement prior to its expiration also constitutes a default under the Lease.

This provision is significant for a prospective Checkers franchisee because it directly ties the lease agreement to the status of the Franchise Agreement. If the franchisee fails to renew their agreement or if the agreement is terminated early, the Landlord can consider this a default, which could lead to potential complications regarding the restaurant's location.

However, this agreement also benefits Checkers, as it gives Checkers the right, but not the obligation, to cure such default by stepping in as the new lessee or sublessee under the Lease. This allows Checkers to maintain control over the location and potentially continue operations with a new franchisee or an entity controlled by Checkers, ensuring the brand's presence is maintained. This clause also stipulates that upon the termination or expiration of the Lease, Checkers has the first right of refusal to lease the Premises as the new lessee or sublessee.