What actions must a Checkersrallys franchisee take after executing a lease for the Restaurant Location following termination or expiration of the Franchise Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) If we elect to require you to execute and deliver to us or our designee a lease for the Restaurant Location, we shall deliver written notice to you within ten (10) days after the effective date of termination or expiration of this Agreement of such election. Following such notice, you and we shall negotiate in good faith a lease for the Real Estate containing commercially reasonable terms with a term equal to a minimum of the remaining Term under this Agreement. If you and we have not agreed to a lease within thirty (30) days after your receipt of our election, we shall engage a Real Estate Appraiser to prepare a lease with commercially reasonable terms. The Real Estate Appraiser's determination will be binding, and you must
execute and deliver to us a lease for the Restaurant Location containing the commercially reasonable terms provided by the Real Estate Appraiser. All fees, compensation and cost and expense reimbursements of the Real Estate Appraiser shall be borne equally by the parties. Upon your execution of the lease for the Restaurant Location, you agree to vacate the Restaurant Location promptly and completely, rendering all necessary assistance to us to enable us to take prompt possession.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, if Checkersrallys elects to have the franchisee execute a lease for the restaurant location after termination or expiration of the franchise agreement, the franchisee must adhere to a specific process. Within ten days of the termination or expiration date, Checkersrallys will notify the franchisee of its election to require a lease. Following this notification, both parties are expected to negotiate a lease with commercially reasonable terms in good faith. The lease term should be a minimum of the remaining term under the original agreement.
If an agreement isn't reached within 30 days of the franchisee receiving Checkersrallys's election notice, a Real Estate Appraiser will be engaged to prepare a lease with commercially reasonable terms. The appraiser's determination is binding on both parties. The franchisee is then obligated to execute and deliver a lease for the restaurant location based on the terms provided by the appraiser. The costs associated with the Real Estate Appraiser are to be split equally between Checkersrallys and the franchisee.
Upon executing the lease, the franchisee must promptly and completely vacate the restaurant location. They also need to provide all necessary assistance to Checkersrallys to ensure a smooth transition of possession. This process ensures that Checkersrallys can maintain control over the restaurant location and continue operations, either directly or through another franchisee, while providing a structured approach to determining lease terms after the franchise agreement ends.