Under what conditions is a transfer of a Checkers franchise considered a breach of the Franchise Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
13. FRANCHISEE'S RIGHT TO TRANSFER.
- 13.01 Franchisor's Approval. The rights and duties created by this Agreement are personal to you or, if you are a business corporation, partnership, limited liability company or other legal entity, your Owners. Accordingly, neither you nor any of your Owners may transfer the Franchise without our approval and without complying with all of the provisions of Section 13. Any transfer without such approval or compliance constitutes a breach of this Agreement and is void and of no force or effect.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, a transfer of the franchise without Checkers's approval and without complying with all the provisions of Section 13 of the franchise agreement constitutes a breach of the agreement. This means that franchisees cannot simply sell or hand over their franchise to someone else without first getting the green light from Checkers and adhering to specific requirements.
Section 13 outlines the conditions for approval, which include the franchisee operating the restaurant in compliance with the agreement, being current on all obligations to Checkers, and ensuring the proposed transferee meets Checkers's standards for character, experience, and financial resources. The transferee must also complete the initial training program and agree to be bound by the existing franchise agreement or execute Checkers's current standard form.
This provision protects Checkers by ensuring that any new franchisee meets their standards and is capable of maintaining the brand's reputation and operational consistency. For a prospective franchisee, this means understanding the transfer process and the importance of finding a qualified buyer who can meet Checkers's requirements if they decide to sell their franchise in the future. Failure to comply with these transfer conditions could result in legal consequences and invalidate the transfer.