Can Checkersrallys disapprove a transfer based on the price and terms of payment?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
nt, 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, Checkersrallys can disapprove a transfer if the material terms and conditions, including the price and terms of payment, are so burdensome that they are likely to adversely affect the transferee's operation of the franchised restaurant or their compliance with franchise agreements and any development agreements.
This means that Checkersrallys has the right to ensure that the financial terms of the transfer are reasonable and will not jeopardize the future success of the restaurant under new ownership. This protects Checkersrallys's brand and the interests of other franchisees by ensuring that new operators are set up for success.
However, Checkersrallys's approval of a transfer does not represent that the terms between the seller and buyer are fair. It also does not release the seller from obligations or waive Checkersrallys's right to demand compliance from the new franchisee. The approval applies only to the specific transfer being proposed and does not affect any other potential transfers.