Under what conditions can Checkers terminate a franchise prior to the expiration of its term?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Checkers can terminate a franchise prior to its expiration only for "good cause." Good cause includes the franchisee's failure to comply with any lawful provision of the franchise agreement. However, Checkers must provide the franchisee with written notice of the failure and a reasonable opportunity to cure it. The cure period need not be more than 30 days.
This provision is included in the FDD to comply with franchise regulations that protect franchisees from arbitrary termination. Many states have franchise laws that prevent franchisors from terminating agreements without demonstrating a legitimate business reason and providing franchisees a chance to correct any issues. This requirement ensures that Checkers franchisees are not unfairly penalized for minor infractions or misunderstandings.
It is important for prospective Checkers franchisees to carefully review the franchise agreement to understand what constitutes a breach of contract and what steps they can take to cure any defaults. Franchisees should also be aware of their rights under state franchise laws, which may provide additional protections against termination. Understanding these conditions is crucial for protecting their investment and ensuring a fair relationship with Checkers.