What happens if a Checkersrallys franchisee breaches another agreement with Checkersrallys such that Checkersrallys has the right to terminate that other agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) if you or any of your Owners or Affiliates are in breach of any Franchise Agreement or other agreement with us or our Affiliates such that we or our Affiliates have the right to terminate the Franchise Agreement or such other agreement, whether or not we or they elect to exercise such right of termination;
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, Checkersrallys has the right to terminate the Development Agreement if a franchisee or their owners/affiliates breach any Franchise Agreement or other agreement with Checkersrallys or its affiliates, giving Checkersrallys or its affiliates the right to terminate that agreement. This is regardless of whether Checkersrallys or its affiliates actually choose to exercise their right of termination.
This provision means that franchisees must maintain compliance across all agreements with Checkersrallys, not just the Development Agreement. A breach in one area, such as a failure to meet standards at an existing franchise location, could trigger termination of the Development Agreement and loss of development rights. This clause underscores the interconnectedness of a franchisee's obligations to Checkersrallys.
Prospective franchisees should carefully review all existing and potential agreements with Checkersrallys to fully understand how a breach in one agreement could impact their broader franchise relationship and development plans. Franchisees should also seek clarification from Checkersrallys regarding what constitutes a breach and what steps can be taken to remedy a breach to avoid termination.