What happens if a Checkersrallys franchisee transfers the franchise without approval?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.01 Franchisor's Approval.The rights and duties created by this Agreement are personal to you or, if you are a business corporation, partnership, limited liability company or other legal entity, your Owners. Accordingly, neither you nor any of your Owners may transfer the Franchise without our approval and without complying with all of the provisions of Section 13. Any transfer without such approval or compliance constitutes a breach of this Agreement and is void and of no force or effect.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee transfers the franchise without obtaining the franchisor's approval and complying with all the provisions outlined in Section 13 of the franchise agreement, such a transfer constitutes a breach of the agreement. Consequently, the transfer is considered void and of no legal effect. This means the purported new franchisee would not have any enforceable rights under the franchise agreement.
This provision underscores the importance Checkersrallys places on controlling who operates its franchises. The approval process ensures that any new franchisee meets the brand's standards for business experience, financial resources, and overall suitability. By requiring approval, Checkersrallys aims to maintain consistency and protect its brand reputation.
For a prospective Checkersrallys franchisee, this means they cannot sell or transfer their franchise to just anyone. They must follow the procedures outlined in Section 13 of the franchise agreement, which includes obtaining Checkersrallys's approval. Failure to do so could result in the transfer being invalidated, potentially leading to legal disputes and loss of the franchise. Franchisees should carefully review Section 13 to understand all the requirements and conditions for a valid transfer.