If a Checkersrallys franchisee breaches the criteria for a fee reduction, what is the required action?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
4. Additional Condition(s).
- b. If you breach, fail to satisfy, or are later found to have violated or failed to satisfy, any of the criteria listed in Section 2 above in this Addendum, at any point during the Term, then in addition to any other remedies available under the Franchise Agreement (including termination) or at applicable law, you must pay us (no later than thirty (30) days after our written notice to you) the amount or value of any fee reduction, discount, or other benefit afforded to you hereunder.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, if a franchisee fails to meet the criteria for a fee reduction outlined in the addendum, Checkersrallys has specific recourse. The franchisee must pay Checkersrallys the amount or value of any fee reduction, discount, or other benefit they received. This payment is due no later than thirty (30) days after Checkersrallys provides written notice to the franchisee. This requirement applies if the franchisee breaches, fails to satisfy, or is later found to have violated any of the criteria listed in Section 2 of the addendum.
This condition is in addition to any other remedies that Checkersrallys may pursue under the Franchise Agreement or applicable law, including the possibility of terminating the agreement. This ensures that Checkersrallys can recover the financial benefits initially provided to the franchisee as part of the incentive program if the franchisee does not fulfill their obligations. The criteria in Section 2, which trigger this repayment obligation, are not detailed in this excerpt, so a prospective franchisee should carefully review the full agreement to understand these specific requirements.
This provision protects Checkersrallys from franchisees who might initially qualify for incentives but subsequently fail to meet the required standards. It also motivates franchisees to adhere to the conditions of the incentive program throughout the term of the agreement. Prospective franchisees should be aware of these conditions and the potential financial implications of non-compliance, ensuring they fully understand the requirements for maintaining the fee reduction and avoiding the repayment obligation.