How does the Checkersrallys Addendum relate to the existing Franchise Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, the Parties now desire to modify the Franchise Agreement according to the terms and conditions set forth in this Addendum.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
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- Relationship to Franchise Agreement; Recitals. This Addendum shall be annexed to and form a part of the Franchise Agreement. All capitalized terms not otherwise defined in this Addendum shall have the meanings set forth in the Franchise Agreement. Except as modified by this Addendum, the Franchise Agreement remains in full force and effect. Any conflict between the provisions hereof and the Franchise Agreement shall be construed in favor of this Addendum. All references in this Addendum to "Sections," "Subsections," and/or "Exhibits" shall mean the applicable Section(s), Subsection(s), and/or Exhibit(s) of the Franchise Agreement, unless specified otherwise below. The Recitals above are incorporated into this Addendum by reference.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the Addendum modifies the existing Franchise Agreement. The purpose of the Addendum is to allow franchisees to qualify for and receive certain incentives. The Addendum is annexed to and becomes part of the original Franchise Agreement. Unless specifically defined in the Addendum, all capitalized terms retain the meanings defined in the original Franchise Agreement. The Franchise Agreement remains in full effect, except as explicitly modified by the Addendum. In case of any conflict, the terms of the Addendum take precedence.
The Addendum includes recitals that are incorporated by reference, setting the stage for the modifications. To qualify for the incentives, franchisees must be in good standing and fully compliant with all existing agreements with Checkersrallys and its affiliates. For Non-Traditional sites, the franchisee must be authorized to operate a restaurant at the premises. The franchisee must also agree to open the franchised restaurant within one year of signing the Franchise Agreement.
The Addendum also addresses specific modifications to fees. For instance, for franchisees that qualify for the incentive, the initial franchise fee may be reduced by $10,000 or $15,000 from the standard fee for a new restaurant. For Non-Traditional sites, the royalty fee may be revised to equal 2% of Net Sales. However, if a franchisee requests a transfer before opening the restaurant, they must pay the full standard initial franchise fee that was originally reduced or waived. Similarly, if a franchisee breaches any of the qualification criteria, they must repay the amount of any fee reduction or discount they received. The Addendum contains the entire understanding of the parties, superseding prior agreements, and can only be modified in writing executed by both parties. Counterparts of the addendum can be executed and signed electronically.