Under what conditions can the Checkers agreement be immediately terminated without notice?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ction, without obtaining our prior consent and complying with all of our requirements and restrictions concerning use of information about us and our Affiliates. Under no circumstances may you or any of its Owners issue or sell your securities or any securities of any of your Affiliates if: (a) such securities would be required to be registered pursuant to the Securities Act of 1933, as amended, or such securities would be owned by more than 35 persons; or (b) after such issuance or sale, you or such Affiliate would be required to comply with the reporting and information requirements of the Securities Exchange Act of 1934, as amended.
8. TERMINATION OF THE AGREEMENT.
- 8.01 Immediate Termination. You are in material breach of this Agreement, and this Agreement will automatically terminate without notice, at our discretion, if you become insolvent by reason of your inability to pay your debts as they mature; if you are adjudicated bankrupt or insolvent; if you file a petition in bankruptcy, reorganization or similar proceeding under the bankruptcy laws of the United States or have such a petition filed against you which is not discharged within 30 days; if a receiver or other custodian, permanent or temporary, is appointed for your business, assets, or property; if you request the appointment of a receiver or make a general assign
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the franchise agreement can be immediately terminated without notice under specific circumstances related to financial instability or legal violations. This immediate termination is at Checkers' discretion.
Specifically, Checkers can terminate the agreement if the franchisee becomes insolvent due to an inability to pay debts, is adjudicated bankrupt or insolvent, files for bankruptcy or similar proceedings (or has such a petition filed against them that is not discharged within 30 days), or has a receiver appointed for their business. Further conditions include requesting the appointment of a receiver, making a general assignment for the benefit of creditors, having a final judgment of $25,000 or more remain unsatisfied for 30 days or longer, or having bank accounts, property, or accounts receivable attached.
Additional causes for immediate termination involve legal actions such as execution levied against the business or property, a suit filed to foreclose any lien or mortgage against assets that is not dismissed within 30 days, or voluntary dissolution or liquidation. The agreement can also be terminated if a petition is filed for corporate or partnership dissolution and is not dismissed within 30 days. Finally, Checkers can immediately terminate the agreement if the franchisee's assets, property, or interests are "blocked" under laws related to terrorist activities or if the franchisee violates any such law or regulation.
These conditions highlight the critical importance of maintaining financial stability and adhering to legal and regulatory requirements for Checkers franchisees. Failure to do so can result in the immediate loss of the franchise without prior notice, emphasizing the risks associated with financial mismanagement or legal non-compliance.