Does Checkersrallys allow for renewal or extension of development rights under the agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
2.01 Term and Development Fee. Unless sooner terminated in accordance with Section 8, the term of this Agreement (the "Term") starts on the Effective Date and expires on the expiration date set forth in Exhibit A. You have no right to renew or extend your rights under this Agreement. At the time you sign this Agreement, you must pay us a development fee in the amount set forth in Exhibit A. The development fee is non-refundable and shall be deemed earned when paid.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the development rights agreement does not allow for renewal or extension. The term of the Development Rights Agreement begins on the effective date and concludes on the expiration date, as specified in Exhibit A. Checkersrallys explicitly states that franchisees have no right to renew or extend their rights under the Development Rights Agreement.
This lack of renewal or extension rights means that a Checkersrallys developer must be prepared to fulfill their development obligations within the initial term. If the developer fails to meet the development schedule, Checkersrallys has the right to terminate the agreement. Upon termination or expiration of the agreement, certain obligations, such as non-compete clauses, remain in effect for a period of two years.
Prospective developers should carefully review Exhibit A of the Development Rights Agreement to understand the specific term and development schedule. They should also assess their ability to meet these obligations within the given timeframe, as failure to do so could result in termination of the agreement and loss of the development fee. Given the lack of renewal options, developers need to plan strategically to maximize their investment during the initial term.