Does Checkersrallys' approval of a transfer of Development Rights constitute a representation as to the fairness of the terms between the franchisee and the transferee?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Our approval of a transfer of the Development Rights does not constitute: (a) a representation as to the fairness of the terms of any agreement or arrangement between you or your Owners and the transferee or as to the prospects of success by the transferee; or (b) a release of you and your Owners, a waiver of any claims against you or your Owners or a waiver of our right to demand the transferee's exact compliance with this Agreement.
Any approval shall apply only to the specific transfer of the Development Rights being proposed and shall not constitute our approval of, or have any bearing on, any other proposed transfer of the Development Rights.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the franchisor's approval of a transfer of Development Rights does not constitute a representation regarding the fairness of the terms between the franchisee and the transferee, nor does it guarantee the transferee's success. Checkersrallys's approval also does not release the franchisee from any claims or waive the franchisor's right to demand compliance from the transferee.
This means that if a franchisee decides to transfer their Development Rights to another party, Checkersrallys's approval of this transfer does not imply that they believe the agreement between the franchisee and the new party is fair or beneficial for either side. The responsibility for assessing the fairness and potential risks of the transfer agreement rests solely with the franchisee and the transferee.
Furthermore, Checkersrallys retains all rights to enforce the franchise agreement against the transferee, regardless of the approval of the transfer. This protects Checkersrallys's interests and ensures that the new franchisee adheres to the established terms and conditions. Any approval applies only to the specific transfer being proposed and does not influence any other proposed transfer of the Development Rights.