What is a condition for Checkersrallys' approval of a Development Rights transfer regarding the number of restaurants the transferor must operate?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
If we have not exercised our right of first refusal under Section 7.06, we will not unreasonably withhold our approval of a Transfer of the Development Rights 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:
- (b) at the time of the proposed Transfer, you have opened and continue to operate at least one (1) Restaurant;
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, a condition for the approval of a Development Rights transfer is that the transferor must have opened and continue to operate at least one restaurant at the time of the proposed transfer. This requirement ensures that the transferor has some level of operational experience with the Checkersrallys system before transferring their development rights to another party.
This condition is in place to protect the Checkersrallys brand and ensure that new franchisees are capable of successfully operating a restaurant. By requiring the transferor to have already opened and operated at least one restaurant, Checkersrallys can be more confident that the transferee will have the necessary skills and knowledge to succeed. This also reduces the risk of a new franchisee failing and potentially damaging the brand's reputation.
For a prospective Checkersrallys franchisee, this means that if they plan to transfer their development rights, they must first open and operate at least one restaurant. This could impact the franchisee's business plan, as they will need to factor in the time and cost of opening and operating a restaurant before they can transfer their development rights. It is important to note that Checkersrallys's approval of a transfer is also subject to other conditions, including the transferee's qualifications and financial resources, as well as compliance with the terms of the franchise agreement.