What agreement must the transferee (and its owners) agree to be bound by for Checkersrallys franchise transfer approval?

According to the 2025 Checkersrallys FDD, for a franchise transfer to be approved, the transferee and their owners must agree to be bound by all the provisions of the existing franchise agreement for the remainder of its term. Alternatively, at Checkersrallys's option, the transferee may be required to execute Checkersrallys's then-current standard form of franchise agreement and related documents used in the state where the franchised restaurant is located. This new agreement may stipulate different royalties, advertising contributions and expenditures, duration, and other rights and obligations compared to the original agreement, and Checkersrallys may require the original franchisee and their owners to guarantee the transferee's obligations under this new agreement.

This condition ensures that Checkersrallys maintains consistent standards and operational practices across all its franchise locations, even when ownership changes. By requiring the transferee to adhere to the existing agreement or sign a new one, Checkersrallys protects its brand and system standards. The potential for a new franchise agreement with different terms means that a prospective transferee needs to carefully review the current franchise agreement and understand that the terms could change upon transfer.

For a prospective Checkersrallys franchisee, this transfer condition highlights the importance of understanding all obligations within the franchise agreement, as a future sale will require the buyer to accept these terms or potentially negotiate a new agreement with different conditions. This also underscores the importance of the relationship between Checkersrallys and its franchisees, as Checkersrallys retains significant control over who can become a franchisee and under what terms.