What happens if Development Rights are transferred without Checkersrallys' prior approval?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Your rights and duties under this Agreement are personal to you and if you are a business corporation, partnership, limited liability company or any other legal entity, your Owners.
Accordingly, neither you nor any of your Owners may Transfer the Development Rights without our prior approval and without complying with the terms and conditions of Section 7.
Any transfer without such approval or compliance constitutes a breach of this Agreement and is void and of no force or effect.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee or their owners transfer development rights without prior approval from Checkersrallys and without complying with the terms outlined in Section 7 of the agreement, such a transfer constitutes a breach of the agreement. Consequently, the transfer is considered void and of no legal effect.
This stipulation underscores the importance Checkersrallys places on controlling who develops their franchises. The requirement for prior approval allows Checkersrallys to vet potential new developers to ensure they meet the brand's standards and have the resources to successfully expand the franchise network. This protects the brand's reputation and ensures consistent quality across all locations.
For a prospective Checkersrallys franchisee, this means that any attempt to sell, assign, or otherwise transfer their development rights without first obtaining Checkersrallys's explicit consent is a serious violation of the franchise agreement. Such an unapproved transfer would not be legally recognized, potentially leading to legal complications and the loss of development rights. Franchisees must adhere strictly to the outlined transfer process to avoid these consequences.