Does the Checkersrallys franchise agreement allow for modifications outside of a written agreement signed by both parties?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| m. | Conditions for franchisor's approval of transfer | Section 13.02 | Restaurant must have opened. Transferee must qualify, complete training, sign existing or new agreement and pay transfer fee; you must guaranty transferee obligations; transferee cannot be public company. You must transfer all of your Restaurants; be in compliance with agreements; subordinate debts and sign a release and non-compete for each transferred Restaurant; we must approve price and payment terms; transferee must agree to remodel; you must execute such other documents that we may reasonably require to protect our rights under the Franchise Agreement and any development agreement. |
| n. | Franchisor's right of first refusal | Section 13.06 | We can match any offer for your business. |
| o. | Franchisor's option to purchase franchisee's franchise | Section 16.04 | We may acquire your Franchised Restaurant upon expiration (without renewal) at fair market value and upon termination at appraised asset value or net book value, whichever is less. |
| p. | Death or disability of franchisee | Section 13.05 | Franchise must be assigned by estate within nine months to a third party we have approved. |
| q. | Non-competition covenants during the term of the franchise | Section 7.02 | No involvement in any competing business regardless of its location. |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 16.03 | No competing business for 2 years at the Premises of your Franchised Restaurant, or within 3 miles of your Franchised Restaurant or any other Checkers Restaurant or Rally's Restaurant. |
| s. | Modification of the agreement | Section 18.10 | Generally, no modifications except by written agreement signed by both parties. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, modifications to both the Franchise Agreement and the Development Agreement generally require a written agreement signed by both Checkersrallys and the franchisee. Specifically, Section 18.10 of the Franchise Agreement and Section 10.10 of the Development Agreement state that modifications must be in writing and signed by both parties.
This requirement for written modifications provides clarity and legal protection for both Checkersrallys and its franchisees. It ensures that any changes to the original agreement are documented and agreed upon by both parties, reducing the risk of misunderstandings or disputes. This is a fairly standard practice in franchising, as it helps maintain the integrity and enforceability of the contractual relationship.
However, there is an exception to this rule. Checkersrallys retains the right to unilaterally change the Operations Manual and System. This means that while the core terms of the Franchise Agreement and Development Agreement require mutual written consent to modify, Checkersrallys can make changes to the operational guidelines and standards without the franchisee's direct consent. Franchisees must stay up-to-date with these changes, as they are obligated to operate their Checkersrallys location according to the most current version of the Operations Manual and System.
Prospective franchisees should carefully review the sections of the Franchise Agreement and Development Agreement pertaining to modifications, as well as understand the scope and potential impact of changes to the Operations Manual and System. It is important to recognize that while the core agreement terms are protected by the written modification requirement, operational aspects of the franchise are subject to change at Checkersrallys's discretion.