What assets are excluded from the personal property that Checkersrallys has the right to purchase upon termination or expiration of the franchise agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
16.04 Option to Purchase Franchised Restaurant.
- (a) Upon termination or expiration (without renewal) of this Agreement, we have the right, exercisable by giving notice thereof ("Appraisal Notice") within ten (10) days after the date of such termination or expiration, to require that a determination be made of the "Agreed Value" (as defined below) of all the personal property used in the Franchised Restaurant which you own, including inventory of non-perishable products, materials, supplies, furniture, equipment, signs, but excluding any cash and short-term investments and any items not meeting our specifications for Restaurants (the "Purchased Assets"). At any time following our providing you an Appraisal Notice, we shall have the unrestricted right to assign this option to purchase separate and apart from the remainder of this Agreement, including, without limitation, to another third-party franchisee. Upon such notice, you may not sell or remove any of the personal property of the Franchised Restaurant from the Premises and must give us (or our assignee), our (or our assignee's) designated agents and the "Appraiser" (as defined below) full access to the Franchised Restaurant and all of your books and records at any time during customary business hours in order to conduct inventories and determine the purchase price for the Purchased Assets.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, Checkersrallys has the option to purchase the franchisee's personal property used in the restaurant. This includes inventory of non-perishable products, materials, supplies, furniture, equipment, and signs.
However, the agreement specifically excludes certain assets from this purchase option. Checkersrallys will not purchase any cash and short-term investments held by the franchisee. Additionally, any items that do not meet Checkersrallys's specifications for restaurants are also excluded from the assets Checkersrallys may purchase.
For a prospective franchisee, this means that upon termination or expiration of the franchise agreement, they will need to liquidate any cash and short-term investments separately. They will also need to ensure that all personal property used in the restaurant meets Checkersrallys's standards to be eligible for potential purchase by the company.