In the Checkersrallys Franchise Agreement, what is the term length for the guarantor's guarantee to the Franchisor?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| In consideration of, and as an inducement to, the execution of the Franchise |
|---|
| Agreement dated as of |
| , |
| (the "Agreement") by and |
| between |
| CHECKERS |
| DRIVE-IN |
| RESTAURANTS, |
| INC. |
| ("Franchisor"), |
| and |
| ("Franchisee"), each of the undersigned owners of an |
| interest in Franchisee hereby personally and unconditionally: |
| (1) guarantees to |
| Franchisor and its successors and assigns, for the term of the Agreement and |
| thereafter as provided in the Agreement, that Franchisee shall punctually pay and |
| perform each and every undertaking, agreement and covenant set forth in the |
| Agreement and that each and every representation of Franchisee made in |
| connection with the Agreement are true, correct and complete in all respects at and |
| as of the time given; and (2) agrees personally to be bound by, and personally liable |
| for the breach of, each and every provision in the Agreement, including without |
| limitation, Sections 5, 7, 8, 13, 16 and 18 (for the avoidance of doubt, including |
| Section 18.05) thereof. |
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the guarantor's guarantee to the Franchisor extends for the term of the Franchise Agreement and continues thereafter as provided in the agreement. This means that the guarantor is responsible for ensuring the franchisee adheres to all obligations, agreements, and covenants outlined in the Franchise Agreement during its entire term.
Furthermore, the guarantor also assures that all representations made by the franchisee in connection with the agreement are accurate, correct, and complete at the time they are given. The guarantor is personally bound by and liable for any breaches of the agreement's provisions, including specific sections related to operations and intellectual property.
This extended guarantee ensures that Checkersrallys has recourse beyond the franchisee entity itself, offering additional security that the terms of the agreement will be upheld. This is a fairly standard practice in franchising, as it protects the franchisor's interests and brand integrity by holding individuals accountable for the performance and compliance of the franchise.
Prospective franchisees should carefully review the Franchise Agreement and related documents to fully understand the implications of the guarantee, including the specific sections mentioned and the conditions under which the guarantee extends beyond the initial term.