Can Checkersrallys assign its option to purchase the personal property of the Franchised Restaurant to a third party?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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, Checkersrallys has the right to assign its option to purchase the personal property of the Franchised Restaurant to a third party. Specifically, upon termination or expiration of the Franchise Agreement, Checkersrallys has the option to purchase the franchisee's personal property used in the restaurant.
Checkersrallys can exercise this option by providing an Appraisal Notice within ten days after the termination or expiration date. Following this notice, Checkersrallys has the unrestricted right to assign this purchase option to another third-party franchisee or any other third party. This means that Checkersrallys is not obligated to directly purchase the assets themselves and can instead transfer this right to another party.
Upon receiving the Appraisal Notice, the franchisee is prohibited from selling or removing any personal property from the premises. The franchisee must also provide Checkersrallys (or its assignee) and the designated appraiser full access to the restaurant and all relevant books and records during business hours to conduct inventories and determine the purchase price for the assets. This ensures that Checkersrallys or its assignee can accurately assess the value of the assets they have the option to purchase.