If a Checkersrallys franchisee executed the agreement pursuant to a development agreement, what must the transferee acquire in a concurrent transaction?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) if you executed this Agreement pursuant to a development agreement, then the transferee must acquire, in a concurrent transaction, all of your rights, and the rights of your Owners and Affiliates, under such development agreement (or any successor development agreement) and all franchise agreements for Restaurants that you or your Owners or Affiliates executed pursuant to such development agreement (or any predecessor or successor development agreement);
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee's agreement was executed under a development agreement, the transferee in a transfer situation must acquire all of the franchisee's rights, as well as the rights of their Owners and Affiliates, under that development agreement (or any successor).
This also includes all franchise agreements for Restaurants that the franchisee, their Owners, or Affiliates executed under the development agreement (or any predecessor or successor agreement). This means that the transferee is taking over the entire development commitment and all existing franchises associated with it, not just a single restaurant.
This condition ensures that Checkersrallys maintains control over its development plans and that new franchisees are fully committed to the original development scope. A prospective franchisee should carefully consider the implications of a development agreement before entering into one, as it can significantly impact their ability to transfer individual franchises later on.