What is the franchisee (and their owners) required to provide to Checkersrallys as partial consideration for the franchisor's willingness to take a requested action?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| Checkers Drive-In Restaurants, Inc. ("we," "us," or "our") and the undersigned |
|---|
| franchisee, ("you" or "your"), |
| currently are parties to a certain Franchise Agreement (the "Franchise Agreement") dated |
| You have asked us to take the following action or to agree to |
| the following request: [insert as appropriate for renewal or transfer situation] |
| . We have the right under the Franchise Agreement to obtain a general |
| release from you (and, if applicable, your owners) as a condition of taking this action or |
| agreeing to this request. Therefore, we are willing to take the action or agree to the request |
| specified above if you (and, if applicable, your owners) |
| give us the release and covenant not |
| to sue provided below in this document. You (and, if applicable, your owners) are willing to |
| give us the release and covenant not to sue provided below as partial consideration for our |
| willingness to take the action or agree to the request described above. |
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee requests that Checkersrallys take a specific action, such as renewal or transfer, Checkersrallys has the right to obtain a general release from the franchisee and their owners. As partial consideration for Checkersrallys's willingness to take the requested action or agree to the franchisee's request, the franchisee (and their owners) must provide Checkersrallys with a release and covenant not to sue.
This means that before Checkersrallys will agree to certain franchisee requests, such as a franchise renewal or transfer, the franchisee and their owners must formally agree to release Checkersrallys from any potential legal claims they may have against the company. They must also promise not to sue Checkersrallys in the future. This is a fairly common practice in franchising, as it protects the franchisor from potential legal issues arising from past actions or the specific request being made by the franchisee.
For a prospective Checkersrallys franchisee, this implies that any time they need Checkersrallys to take an action or agree to a request, they may be required to sign a release. This could include situations like transferring the franchise to a new owner, renewing the franchise agreement, or making significant changes to the business. Franchisees should carefully consider the implications of such a release and covenant not to sue, as it could limit their legal options in the future. It is advisable to consult with an attorney before signing any such document to fully understand the rights they are waiving.