Under what conditions will a permanently closed Checkers restaurant be considered open for 6 months after its closure for the purposes of the chart in Section 3(a)?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of the chart in Section 3(a), above, a Restaurant that is permanently closed after having been opened, other than as a result of noncompliance by you with the terms of the applicable Franchise Agreement, shall be deemed open for a period of 6 months after the last day it was open for business, provided that: (i) during such period of time, you continuously and diligently take such actions as may be required to develop and open a substitute Restaurant within the Development Area pursuant to a new Franchise Agreement therefor; and (ii) by the end of such period you have the substitute Restaurant open and operating in compliance with the Franchise Agreement therefor.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, a permanently closed restaurant will be considered open for six months after its closure for the purposes of the chart in Section 3(a) under specific conditions. This applies only if the closure is not due to the franchisee's noncompliance with the Franchise Agreement.
During this six-month period, the franchisee must continuously and diligently work to develop and open a substitute Checkers restaurant within the Development Area. This involves entering into a new Franchise Agreement for the substitute location.
To maintain the 'open' status for those six months, the franchisee must have the substitute Checkers restaurant open and operating in compliance with its Franchise Agreement by the end of that six-month window. This provision appears designed to allow franchisees to relocate a store without penalty, provided they act quickly to re-establish their presence.
This condition benefits the franchisee by providing a grace period to re-establish their business without immediately impacting their development schedule or other obligations tied to the number of open restaurants. However, it also places a strict requirement on the franchisee to act quickly and diligently to secure a new location and resume operations to avoid any potential penalties or breaches of the agreement.