Under what conditions can the Checkers franchise agreement be immediately terminated without notice?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
of your Affiliates, if: (1) 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 (2) 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.
14. TERMINATION OF AGREEMENT.
14.01 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 proceedings under the bankruptcy laws of the United States or have such a petition filed against you which is not discharged within thirty (30) days; if a receiver or other custodian, permanent or temporary, is appointed for your business, assets, property; if you request the appointment of a receiver or make a general assignment for the benefit of creditors; if final judgment against you in the amount of Twenty-Five Thousand Dollars ($25,000) or more remains unsatisfied of record for thirty (30) days or longer; if your bank accounts, property or accounts receivable are attached; if execution is levied against your business or property; if suit is filed to foreclose any lien or mortgage against any of your assets and such suit is not dismissed
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the franchise agreement can be immediately terminated without notice under specific financial and legal conditions. These conditions include becoming insolvent due to an inability to pay debts, being adjudicated bankrupt or insolvent, or filing a bankruptcy petition that is not discharged within 30 days.
Immediate termination also occurs if a permanent or temporary receiver is appointed for the franchisee's business, assets, or property, or if the franchisee requests such an appointment or makes a general assignment for the benefit of creditors. Furthermore, a final judgment against the franchisee of $25,000 or more that remains unsatisfied for 30 days or longer, the attachment of bank accounts, property, or accounts receivable, or the levying of execution against the business or property can trigger immediate termination.
Additional causes for immediate termination involve legal actions such as the filing of a suit to foreclose on any lien or mortgage against the franchisee's assets if the suit is not dismissed within 30 days, or the voluntary dissolution or liquidation of the franchise, including the filing of a petition for corporate or partnership dissolution that is not dismissed within 30 days. Finally, if the franchisee's assets, property, or interests are "blocked" under laws or regulations related to terrorist activities, or if the franchisee violates any such law or regulation, the agreement can be terminated immediately without notice.
These terms are typical in franchise agreements to protect the franchisor from financial or legal liabilities associated with a struggling or non-compliant franchisee. A prospective Checkers franchisee should understand these conditions thoroughly, as any of these events could lead to the immediate loss of their franchise.