What agreement must each person who is or becomes an Owner execute for a Checkersrallys franchise?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| In consideration of, and as an inducement to, the execution of the Franchise |
|---|
| Agreement dated as of |
| , |
| (the "Agreement") by and |
| between |
| CHECKERS |
| DRIVE-IN |
| RESTAURANTS, |
| INC. |
| ("Franchisor"), |
| and |
| ("Franchisee"), each of the undersigned owners of an |
| interest in Franchisee hereby personally and unconditionally: |
| (1) guarantees to |
| Franchisor and its successors and assigns, for the term of the Agreement and |
| thereafter as provided in the Agreement, that Franchisee shall punctually pay and |
| perform each and every undertaking, agreement and covenant set forth in the |
| Agreement and that each and every representation of Franchisee made in |
| connection with the Agreement are true, correct and complete in all respects at and |
| as of the time given; and (2) agrees personally to be bound by, and personally liable |
| for the breach of, each and every provision in the Agreement, including without |
| limitation, Sections 5, 7, 8, 13, 16 and 18 (for the avoidance of doubt, including |
| Section 18.05) thereof. |
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, each owner of an interest in the franchisee must personally and unconditionally guarantee the franchisee's obligations under the Franchise Agreement. This means that each owner is guaranteeing that the franchisee will punctually pay and perform every undertaking, agreement, and covenant outlined in the Franchise Agreement. They also guarantee that all representations made by the franchisee in connection with the agreement are true, correct, and complete.
Furthermore, each owner agrees to be personally bound by and liable for any breach of any provision in the Franchise Agreement. This includes, but is not limited to, specific sections such as Sections 5, 7, 8, 13, 16, and 18, with particular emphasis on Section 18.05. This personal guarantee extends for the entire term of the Franchise Agreement and even after, as specified in the agreement.
In practical terms, this requirement means that the personal assets of each owner are at risk if the Checkersrallys franchise fails to meet its financial or operational obligations. This is a significant commitment and should be carefully considered by anyone contemplating becoming an owner of a Checkersrallys franchise. It is common practice in franchising for franchisors to seek personal guarantees from owners to ensure the franchisee's compliance and financial stability.