If a Checkersrallys franchisee fails to meet any part of the Development Schedule, what action can Checkersrallys take?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.02 Termination Upon Notice.
In addition to our right to terminate pursuant to other provisions of this Agreement or under applicable law, we may terminate this Agreement, effective upon delivery of notice of termination to you:
(a) if you fail to meet any part of the Development Schedule;
(b) if you or any of your Owners or Affiliates make an unauthorized transfer of the Development Rights;
(c) if you or any of your Owners or Affiliates make any material misstatement or omission in the application for the development rights conferred by this Agreement or in any other information provided to us, or are convicted of, or plead no contest to, a felony or other crime or offense that we reasonably believe may adversely affect the goodwill associated with the Marks;
(d) if you or any of your Owners or Affiliates make any unauthorized use or disclosure of the Confidential Information;
(e) if you or any of your Owners or Affiliates fail to comply with any other provision of this Agreement and do not correct such failure within 30 days after written notice of such failure to comply is delivered to you;
(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; or
(g) if we determine that any applicable federal or state legislation, regulation or rule, which is enacted, promulgated or amended after the Effective Date, may have an adverse effect on our rights, remedies or discretion in franchising Restaurants.
We have no obligation whatsoever to refund any portion of the development fee upon any termination, except that we will refund the unapplied portion of the development fee paid pursuant to Section 2.01 in the event of a termination pursuant to Section 8.02(g).
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee fails to meet any part of the Development Schedule, Checkersrallys has the right to terminate the Development Agreement. This termination is effective upon delivery of a termination notice to the franchisee.
This provision gives Checkersrallys a significant degree of control over the development process. It ensures that franchisees adhere to the agreed-upon timelines for opening new restaurants. For a prospective franchisee, this means that failing to meet the Development Schedule outlined in the agreement can have serious consequences, including the loss of development rights.
It's important to note that Checkersrallys has the right to terminate the agreement if the franchisee fails to meet any part of the Development Schedule. This could include delays in site selection, construction, or any other milestone outlined in the schedule. Franchisees should carefully review the Development Schedule and ensure they have the resources and capabilities to meet the required timelines. Checkersrallys is not obligated to refund any portion of the development fee upon termination, except for the unapplied portion of the development fee paid pursuant to Section 2.01 in the event of a termination pursuant to Section 8.02(g).