For Checkersrallys franchisees that are business entities, what three requirements must the designated 'Operating Partner' meet?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate in Exhibit A as the "Operating Partner" an individual we approve who must: (a) own and control, or have the right to own and control (subject to conditions reasonably acceptable to us) not less than ten percent (10%) of your equity and voting rights; (b) have the authority to make, and bind you and all your Owners to, all operational decisions regarding the Franchised Restaurant; and (c) complete our training program to our satisfaction before engaging in his or her operational duties. You may not change the Operating Partner without our prior written consent.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 64–65)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee is a business entity, the designated Operating Partner must meet three specific requirements. First, the Operating Partner must own and control, or have the right to own and control, at least 10% of the equity and voting rights of the business entity, subject to conditions reasonably acceptable to Checkersrallys. This ensures the Operating Partner has a vested interest and a degree of control over the franchise.
Second, the Operating Partner must have the authority to make and bind the business entity and all its owners to all operational decisions regarding the franchised restaurant. This requirement ensures that the Operating Partner can act decisively and is accountable for the restaurant's operations.
Third, the Operating Partner must complete Checkersrallys's training program to the franchisor's satisfaction before engaging in operational duties. This ensures that the Operating Partner is properly trained in the Checkersrallys system and can effectively manage the restaurant according to Checkersrallys's standards. Checkersrallys must provide prior written consent before a franchisee can change the Operating Partner.