How does a default or breach by a Checkersrallys franchisee under another agreement with Checkersrallys affect the Development Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
8.03 Cross-Default. Any default or breach by you (or any of your Owners) or your Affiliate (or any of your Owner's Affiliates) of any other agreement with us or our Affiliate will be considered an event of default under this Agreement, and any default or breach by you (or any of your Owners) of this Agreement will be considered an event of default or breach by you under any and all agreements between us or our Affiliate and you (or any of your Owners) or your Affiliate (or any of your Owner's Affiliates). If the nature of the default under any other agreement would have been considered an event of default under this Agreement, then we or our Affiliate will have the right to terminate all other agreements between us or our Affiliate and you (or any of your Owners) or your Affiliate (or any of your Owner's Affiliates) in accordance with the termination provisions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, a default or breach by a franchisee (or their Owners) under any other agreement with Checkersrallys or its affiliates is considered an event of default under the Development Agreement. This "cross-default" provision means that if a Checkersrallys franchisee fails to meet their obligations in one area, such as a franchise agreement for a specific restaurant, it can trigger a default under the Development Agreement, which covers the rights to develop multiple locations.
Specifically, the FDD states that any default or breach by the franchisee (or their Owners) of any other agreement with Checkersrallys or its affiliate will be considered an event of default under the Development Agreement. Conversely, any default or breach of the Development Agreement will be considered a default or breach under any and all agreements between Checkersrallys (or its affiliate) and the franchisee (or their Owners).
Furthermore, if the nature of the default under any other agreement would have been considered an event of default under the Development Agreement, Checkersrallys or its affiliate has the right to terminate all other agreements between them and the franchisee (or their Owners). This could have significant implications for a franchisee, potentially leading to the termination of multiple agreements and the loss of development rights if a single default occurs. Franchisees should carefully review all agreements to understand how a default in one area could impact their broader relationship with Checkersrallys.