For Checkersrallys, what authority must the Operating Partner have regarding the Franchised Restaurant?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate in Exhibit A as the "Operating Partner" an individual we approve who must: (a) own and control, or have the right to own and control (subject to conditions reasonably acceptable to us) not less than ten percent (10%) of your equity and voting rights; (b) have the authority to make, and bind you and all your Owners to, all operational decisions regarding the Franchised Restaurant; and (c) complete our training program to our satisfaction before engaging in his or her operational duties. You may not change the Operating Partner without our prior written consent.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 64–65)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if the franchisee is a business entity, they must designate an Operating Partner who meets specific requirements. This Operating Partner must be approved by Checkersrallys and must have the authority to bind the franchisee regarding all operational decisions concerning the franchised restaurant. This means the Operating Partner has the power to make final decisions on day-to-day operations and commit the business entity to those decisions.
In addition to having the authority to make operational decisions, the Operating Partner must also own and control, or have the right to own and control, at least 10% of the franchisee's equity and voting rights, subject to conditions reasonably acceptable to Checkersrallys. The Operating Partner is also required to complete Checkersrallys's training program to their satisfaction before engaging in operational duties. Furthermore, Checkersrallys's prior written consent is required before any change to the Operating Partner can be made.
This requirement ensures that Checkersrallys has a direct point of contact with sufficient authority and investment in the franchise to ensure brand standards and operational consistency. It also protects Checkersrallys by ensuring the Operating Partner is properly trained and committed to the business. For a prospective franchisee, this means that if they operate under a business entity, they must carefully select an Operating Partner who meets these criteria and is prepared to undergo the required training and maintain a significant stake in the business.