Under what conditions can Checkers modify the franchise agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| m. | Conditions for franchisor's approval of transfer | Section 13.02 | Restaurant must have opened. Transferee must qualify, complete training, sign existing or new agreement and pay transfer fee; you must guaranty transferee obligations; transferee cannot be public company. You must transfer all of your Restaurants; be in compliance with agreements; subordinate debts and sign a release and non-compete for each transferred Restaurant; we must approve price and payment terms; transferee must agree to remodel; you must execute such other documents that we may reasonably require to protect our rights under the Franchise Agreement and any development agreement. |
| n. | Franchisor's right of first refusal | Section 13.06 | We can match any offer for your business. |
| o. | Franchisor's option to purchase franchisee's franchise | Section 16.04 | We may acquire your Franchised Restaurant upon expiration (without renewal) at fair market value and upon termination at appraised asset value or net book value, whichever is less. |
| p. | Death or disability of franchisee | Section 13.05 | Franchise must be assigned by estate within nine months to a third party we have approved. |
| q. | Non-competition covenants during the term of the franchise | Section 7.02 | No involvement in any competing business regardless of its location. |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 16.03 | No competing business for 2 years at the Premises of your Franchised Restaurant, or within 3 miles of your Franchised Restaurant or any other Checkers Restaurant or Rally's Restaurant. |
| s. | Modification of the agreement | Section 18.10 | Generally, no modifications except by written agreement signed by both parties. However, the Operations Manual and System are subject to change by us. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the franchise agreement can generally only be modified through a written agreement that is signed by both Checkers and the franchisee. This requirement is in place to ensure that both parties are in agreement with any changes to the original contract terms.
However, there is an exception to this rule. Checkers retains the right to unilaterally change the Operations Manual and System. These changes do not require the franchisee's written consent. This is a fairly standard practice in franchising, as it allows the franchisor to adapt the operating system to changing market conditions, updated technologies, or improved business practices.
For a prospective Checkers franchisee, it's crucial to understand that while the core franchise agreement is protected from unilateral changes, the Operations Manual and System are subject to change at Checkers's discretion. Franchisees should carefully review the scope and potential impact of changes to the Operations Manual and System before investing in a Checkers franchise.