Within how many days after termination or expiration of the Checkers agreement must Checkers provide an Appraisal Notice to exercise their purchase option?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Upon termination or expiration (without renewal) of this Agreement, we have the right, exercisable by giving notice thereof ("Appraisal Notice") within ten (10) days after the date of such termination or expiration, to require that a determination be made of the "Agreed Value" (as defined below) of all the personal property used in the Franchised Restaurant which you own, including inventory of non-perishable products, materials, supplies, furniture, equipment, signs, but excluding any cash and short-term investments and any items not meeting our specifications for Restaurants (the "Purchased Assets"). At any time following our providing you an Appraisal Notice, we shall have the unrestricted right to assign this option to purchase separate and apart from the remainder of this Agreement, including, without limitation, to another third-party franchisee. Upon such notice, you may not sell or remove any of the personal property of the Franchised Restaurant from the Premises and must give us (or our assignee), our (or our assignee's) designated agents and the "Appraiser" (as defined below) full access to the Franchised Restaurant and all of your books and records at any time during customary business hours in order to conduct inventories and determine the purchase price for the Purchased Assets.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Checkers has the option to purchase the franchised restaurant upon termination or expiration of the franchise agreement. To exercise this option, Checkers must provide an Appraisal Notice within ten days after the termination or expiration date.
This means that if a Checkers franchise agreement ends, either through a decision not to renew or due to a termination event, Checkers has a limited window to notify the franchisee of their intent to buy the restaurant's assets. This Appraisal Notice triggers a process to determine the value of the restaurant's personal property, including inventory, furniture, and equipment.
For a prospective Checkers franchisee, this clause highlights the importance of understanding the conditions under which the franchise agreement can be terminated or expire. It also emphasizes that Checkers has the right to purchase the restaurant's assets, which could impact the franchisee's exit strategy and potential return on investment. The franchisee should be prepared for the possibility of Checkers exercising this purchase option and should understand the valuation process outlined in the franchise agreement.