In the context of a Checkersrallys franchise transfer, what other documents and actions are required of me, my Owners, and Affiliates to protect the franchisor's rights?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Restaurant will be transferred on the same day, notwithstanding anything to the contrary in any other franchise agreement governing another Restaurant that is included as part of the transfer, the transfer fee will be Twenty Thousand Dollars ($20,000) or Ten Thousand Dollars ($10,000) for the first Restaurant, depending on whether the transfer is to a new franchisee or a then-current franchisee, plus Five Thousand Dollars ($5,000) for each additional Restaurant to be transferred;
- (i) you and your Owners and Affiliates must, except to the extent limited or prohibited by applicable law, execute a general release, in form and substance satisfactory to us, of any and all claims against us and our Affiliates, stockholders, officers, directors, employees, agents, successors and assigns;
- (j) we 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, in our judgment, to adversely affect the transferee's operation of the Franchised Restaurant or its compliance with its franchise agreements and any development agreements;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, when transferring a franchise, you, your Owners, and Affiliates must fulfill certain obligations to protect Checkersrallys's rights. Specifically, you must execute a general release of all claims against Checkersrallys and its Affiliates, stockholders, officers, directors, employees, agents, successors, and assigns, in a form and substance satisfactory to Checkersrallys, except where prohibited by law.
Additionally, if you, your Owners, or Affiliates finance any part of the sale price, you must agree that the transferee's obligations and any security interests you hold in the Franchised Restaurant's assets will be subordinate to the transferee's obligations to pay all amounts due to Checkersrallys and its Affiliates and to comply with the franchise agreement. Furthermore, you and your Immediate Family must agree not to engage in activities proscribed in Section 16.03 for two years following the transfer's effective date.
Finally, you, your Owners, and Affiliates must execute any other documents and perform any other actions that Checkersrallys may reasonably require to protect its rights under the Franchise Agreement and any development agreement. These stipulations ensure that Checkersrallys's interests are safeguarded during and after the transfer of the franchise, maintaining the integrity of the brand and the franchise system.