What conditions must a Checkersrallys franchisee meet to get franchisor approval of a transfer?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| Section 18.08 | | k. | "Transfer" by franchisee defined | Section 1.04 | | l. | Franchisor's approval of transfer by franchisee | Sections 13.01 and 13.02 | | | PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |----|------------------------------------------------------------------------------------|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | m. | Conditions for franchisor's approval of transfer | Section 13.02 | Restaurant must have opened. Transferee must qualify, complete training, sign existing or new agreement and pay transfer fee; you must guaranty transferee obligations; transferee cannot be public company. You must transfer all of your Restaurants; be in compliance with agreements; subordinate debts and sign a release and non-compete for each transferred Restaurant; we must approve price and payment terms; transferee must agree to remodel; you must execute such other documents that we may reasonably require to protect our rights under the Franchise Agreement and any development agreement. | | n. | Franchisor's right of first refusal | Section 13.06 | We can match any offer for your business. | | o. | Franchisor's option to purchase franchisee's franchise | Section 16.04 | We may acquire your Franchised Restaurant upon expiration (without renewal) at fair market value and upon termination at appraised asset value or net book value, whichever is less. | | p.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, both franchisees and transferees must meet certain conditions to gain approval for a transfer. For a franchise agreement, the restaurant must have already opened. The franchisee must transfer all of their restaurants, be in compliance with all agreements, subordinate debts, and sign a release and non-compete agreement for each transferred restaurant. The franchisor must also approve the price and payment terms of the transfer. The franchisee may also need to execute other documents to protect Checkersrallys's rights under the Franchise Agreement and any development agreement.
For a development agreement, the franchisee must transfer all of their restaurants, be in compliance with all agreements, have at least one restaurant open, and sign a release and non-compete agreement for each transferred restaurant.
In both cases, the transferee must qualify as a franchisee, complete the required training, sign either the existing agreement or a new agreement, and pay the transfer fee. The transferee cannot be a public company. These stipulations ensure that any new franchisee meets Checkersrallys's standards and is financially stable, protecting the brand and other franchisees.