What happens if a Checkersrallys franchisee fails to demonstrate sufficient financial and management capabilities?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) We also may require that you and your Owners furnish us financial statements (historical and pro forma), statements of the sources and uses of capital funds, budgets and other information regarding yourself, your Owners and the development and operation of any Restaurant you propose, as well as any then-existing Restaurants you and your Affiliates own. All such information shall be verified by you and your Owners as being complete and accurate in all respects, shall be submitted to us in accordance with our requirements and will be relied on by us in determining whether to grant a franchise for the proposed Restaurant. We may refuse to grant you a franchise for a Restaurant if you fail to demonstrate sufficient financial and management capabilities to properly develop and operate the proposed Restaurant and the then existing Restaurants you and your Affiliates own. We will evaluate such financial and management capabilities in accordance with standards we use to establish Restaurants in other comparable market areas.
- (d) Upon our acceptance of a proposed site, and provided you have demonstrated the requisite financial and management capabilities, all as above required, we will offer you a franchise to operate a Restaurant at the proposed site by delivering to you our then-current form of standard franchise agreement, together with all standard ancillary documents (including exhibits, riders, collateral assignments of leases, Owner guarantees and other related documents) that we then customarily use in granting franchises for the operation of Restaurants in the state in which the Restaurant is to be located (the "Franchise Agreement"). The Franchise Agreement must be executed by you and your Owners and returned to us not earlier than 7 days and not later than 21 days after we deliver it to you, with payment of the initial fees required thereunder. If we do not receive the fully executed Franchise Agreement and payment of the required initial fees, we may revoke our offer to grant you a franchise to operate a Restaurant at the proposed site and may revoke our acceptance of the proposed site.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys may refuse to grant a franchise for a Restaurant if a prospective franchisee fails to demonstrate sufficient financial and management capabilities to properly develop and operate the proposed Restaurant and any existing Restaurants they or their Affiliates own. Checkersrallys will evaluate these capabilities using standards comparable to those used in other similar market areas.
This evaluation is part of the process where Checkersrallys may require franchisees and their Owners to furnish financial statements (both historical and pro forma), statements of capital fund sources and uses, budgets, and other information about themselves, their Owners, and the development and operation of any proposed Restaurant, as well as any existing Restaurants they and their Affiliates own. Franchisees and Owners must verify that all such information is complete and accurate, submit it according to Checkersrallys's requirements, and acknowledge that Checkersrallys will rely on this information when deciding whether to grant a franchise.
Demonstrating adequate financial and management capabilities is a prerequisite for Checkersrallys to offer a franchise agreement after accepting a proposed site. If a franchisee meets these requirements, Checkersrallys will deliver its current standard franchise agreement and related documents. The franchisee and their Owners must then execute and return the Franchise Agreement within a specific timeframe (not earlier than 7 days and not later than 21 days after delivery) along with the required initial fees. Failure to do so may result in Checkersrallys revoking the franchise offer and site acceptance.