How does a default or breach by a Checkersrallys franchisee under the Development Agreement affect other agreements with Checkersrallys?

According to the 2025 Checkersrallys Franchise Disclosure Document, a default or breach by a franchisee (or their Owners) under the Development Agreement has significant implications for other agreements with Checkersrallys or its affiliates. Specifically, any default or breach of the Development Agreement is considered an event of default under any and all agreements between Checkersrallys (or its affiliates) and the franchisee (or their Owners).

Conversely, the FDD states that any default or breach by the franchisee (or their Owners) of any other agreement with Checkersrallys or its affiliates will be considered an event of default under the Development Agreement. This cross-default provision means that if a franchisee fails to meet the terms of one agreement, Checkersrallys can treat it as a default across all agreements.

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 termination would be in accordance with the termination provisions outlined in the Development Agreement. This clause creates a significant risk for franchisees, as a relatively minor infraction under one agreement could trigger the termination of all agreements, potentially leading to substantial financial losses.