In the context of a Checkersrallys franchise, what is the franchisee providing in exchange for Checkers Drive-In Restaurants, Inc.'s willingness to take a specific action or agree to a request?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| Checkers Drive-In Restaurants, Inc. ("we," "us," or "our") and the undersigned |
|---|
| franchisee, ("you" or "your"), |
| currently are parties to a certain Franchise Agreement (the "Franchise Agreement") dated |
| You have asked us to take the following action or to agree to |
| the following request: [insert as appropriate for renewal or transfer situation] |
| . We have the right under the Franchise Agreement to obtain a general |
| release from you (and, if applicable, your owners) as a condition of taking this action or |
| agreeing to this request. Therefore, we are willing to take the action or agree to the request |
| specified above if you (and, if applicable, your owners) |
| give us the release and covenant not |
| to sue provided below in this document. You (and, if applicable, your owners) are willing to |
| give us the release and covenant not to sue provided below as partial consideration for our |
| willingness to take the action or agree to the request described above. |
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, if a franchisee asks Checkers Drive-In Restaurants, Inc. to take a specific action or agree to a request, Checkersrallys has the right to obtain a general release from the franchisee (and their owners, if applicable) as a condition of fulfilling that request. In exchange for Checkersrallys's willingness to act or agree, the franchisee (and their owners, if applicable) must provide a release and covenant not to sue Checkersrallys. This release serves as partial consideration for Checkersrallys's agreement to the franchisee's request.
In simpler terms, this means that if a Checkersrallys franchisee wants the franchisor to do something outside the normal franchise agreement (like renewing or transferring the franchise), Checkersrallys can require the franchisee to sign a document releasing them from any potential future lawsuits related to the franchise agreement. This protects Checkersrallys from legal action by the franchisee in connection with the specific action or request.
This is a fairly standard practice in franchising. Franchisors often seek releases to avoid future disputes when making exceptions or granting requests outside the original agreement. However, franchisees should carefully review any release and covenant not to sue with a legal professional to fully understand the rights they are waiving before signing. The franchisee should be fully aware of the implications before agreeing to the terms.