Does a Checkersrallys franchisee's failure to comply with the development schedule in a Development Agreement automatically result in termination of the Franchise Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, if you are operating under a Development Agreement that terminates solely as a result of your failure to comply with the development schedule set forth in that agreement, then such termination of the Development Agreement will not result in a termination (constructive or otherwise) of this Agreement if you have
fully performed and otherwise been in compliance with all of your obligations under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the termination of a Development Agreement due to failure to comply with the development schedule does not automatically result in the termination of the Franchise Agreement. However, this is conditional. If the Checkersrallys franchisee has fully performed and is otherwise in compliance with all obligations under the Franchise Agreement, the termination of the Development Agreement will not lead to a termination of the Franchise Agreement.
This provision protects franchisees who may have had issues meeting the development schedule outlined in their Development Agreement but are otherwise fulfilling their obligations under the Franchise Agreement for existing locations. It prevents Checkersrallys from terminating a successful franchise operation solely based on a failure to meet expansion targets.
However, it is crucial for a Checkersrallys franchisee to remain compliant with all other aspects of the Franchise Agreement. Any other defaults or breaches under the Franchise Agreement could still trigger termination, regardless of the Development Agreement status. This highlights the importance of understanding and adhering to all contractual obligations with Checkersrallys.