Does Checkersrallys' approval of a franchise transfer constitute a representation about the fairness of the agreement terms between me and the transferee?

According to Checkersrallys's 2025 Franchise Disclosure Document, the franchisor's approval of a franchise transfer does not constitute a representation as to the fairness of the terms of any agreement between the franchisee and the transferee. Nor does it represent the prospects of success of the franchised restaurant by the transferee. This means that Checkersrallys's consent to the transfer is simply an acknowledgement that the new franchisee meets their requirements, and it does not imply any endorsement of the financial or contractual arrangements between the seller and the buyer.

This provision protects Checkersrallys from potential liability related to disputes between the transferring franchisee and the new franchisee. It clarifies that Checkersrallys is not responsible for ensuring that both parties receive fair terms in their private agreement. The approval is limited to the specific transfer and does not have bearing on any other transfer of the franchise.

For a prospective Checkersrallys franchisee, this means you should not assume that Checkersrallys is validating the financial terms of your transfer agreement if you decide to sell your franchise. It is your responsibility to ensure you are getting a fair deal, and you should seek independent legal and financial advice during the transfer process. Similarly, a buyer should not rely on Checkersrallys's approval as a guarantee of the restaurant's future performance or the fairness of the purchase terms.

This is a fairly standard clause in franchise agreements. Franchise systems want to maintain control over who joins their system, but they do not want to get involved in the financial negotiations between franchisees. Prospective franchisees should carefully consider this when planning their exit strategy or when purchasing an existing Checkersrallys franchise.