What conditions must be met for Checkersrallys to approve a transfer of the franchise by the franchisee?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
or | 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, the conditions for the franchisor's approval of a transfer are detailed in Section 13.02 of the Franchise Agreement and Section 7.02 of the Development Agreement. For a franchise agreement transfer, the restaurant must be open. The person or entity to whom the franchise is being transferred (the transferee) must meet Checkersrallys's qualification standards and complete the required training. The transferee must also sign either the existing franchise agreement or a new one, and pay the applicable transfer fee. The franchisee (you) must guarantee the transferee's obligations. The transferee cannot be a public company.
Additionally, the franchisee must transfer all of their Checkersrallys restaurants, be in compliance with all agreements, and subordinate any debts. The franchisee must also sign a release and non-compete agreement for each transferred restaurant. Checkersrallys must approve the price and payment terms of the transfer. The transferee must agree to remodel the restaurant if required. Finally, the franchisee must execute any other documents that Checkersrallys reasonably requires to protect its rights under the Franchise Agreement and any development agreement.
For a development agreement transfer, the franchisee must transfer all of their restaurants, be in compliance with all agreements, and have at least one restaurant open. They must also sign a release and non-compete agreement for each transferred restaurant and fulfill any other requests made by Checkersrallys. The transferee must meet Checkersrallys's qualifications, sign the existing agreement, pay the transfer fee, and cannot be a public company. Checkersrallys retains the right to approve all transfers, but states that approval will not be unreasonably withheld if the specified conditions are satisfied.