What compliance requirements must Checkersrallys franchisees and their owners meet to be approved for a franchise transfer?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
or's Approval**.The rights and duties created by this Agreement are personal to you or, if you are a business corporation, partnership, limited liability company or other legal entity, your Owners. Accordingly, neither you nor any of your Owners may transfer the Franchise without our approval and without complying with all of the provisions of Section 13. Any transfer without such approval or compliance constitutes a breach of this Agreement and is void and of no force or effect.
- 13.02 Conditions for Approval.If we have not exercised our right of first refusal under Section 13.06, we will not unreasonably withhold our approval of a transfer of the Franchise that meets all of the reasonable restrictions, requirements and conditions we impose on the transfer, the transferor(s) and/or the transferee(s), including the following:
- (a) you have completed development of the Franchised Restaurant and are operating the Franchised Restaurant in accordance with this Agreement;
- (b) you and your Owners and Affiliates are in compliance with the provisions of this Agreement and all other agreements with us or any of our Affiliates;
- (c) the proposed transferee, or its Owners (if the proposed transferee is a legal entity), must provide us on a timely basis all information we request, must be individuals acting in their individual capacities who are of good character and reputation, who must have sufficient business experience, aptitude and financial resources to operate the Franchised Restaurant, and who must otherwise meet our approval;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, both the franchisee and their owners must meet specific compliance requirements to gain approval for a franchise transfer. Checkersrallys maintains the right to approve or disapprove a transfer, ensuring that any transfer aligns with their standards and protects their interests.
To gain approval, the franchisee must have completed the development of the franchised restaurant and be operating it in accordance with the franchise agreement. Furthermore, the franchisee, their owners, and affiliates must be in compliance with all provisions of the franchise agreement and any other agreements they have with Checkersrallys or its affiliates. This ensures that the franchisee has a solid operational foundation and is not in breach of any existing obligations.
Additionally, the franchisee and their owners and affiliates must execute a general release of any and all claims against Checkersrallys and its affiliates, stockholders, officers, directors, employees, agents, successors, and assigns, in a form and substance satisfactory to Checkersrallys, except to the extent limited or prohibited by applicable law. The franchisor must not have disapproved the material terms and conditions of such transfer (including the price and terms of payment) on the basis that they are so burdensome as to be likely to adversely affect the transferee's operation of the Franchised Restaurant or its compliance with its franchise agreements and any development agreements; and you and your Owners and Affiliates must execute such other documents and do such other things as we may reasonably require to protect our rights under this Agreement and under any development agreement.
These conditions ensure that Checkersrallys maintains control over who enters their franchise system and that the transfer does not negatively impact the brand or other franchisees. Franchisees looking to transfer their franchise should ensure they are fully compliant with all agreements and prepared to meet these conditions to facilitate a smooth transfer process.