After Checkersrallys provides an Appraisal Notice, what are the franchisee's obligations regarding the personal property of the Franchised Restaurant?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Upon termination or expiration (without renewal) of this Agreement, we have the right, exercisable by giving notice thereof ("Appraisal Notice") within ten (10) days after the date of such termination or expiration, to require that a determination be made of the "Agreed Value" (as defined below) of all the personal property used in the Franchised Restaurant which you own, including inventory of non-perishable products, materials, supplies, furniture, equipment, signs, but excluding any cash and short-term investments and any items not meeting our specifications for Restaurants (the "Purchased Assets"). At any time following our providing you an Appraisal Notice, we shall have the unrestricted right to assign this option to purchase separate and apart from the remainder of this Agreement, including, without limitation, to another third-party franchisee. Upon such notice, you may not sell or remove any of the personal property of the Franchised Restaurant from the Premises and must give us (or our assignee), our (or our assignee's) designated agents and the "Appraiser" (as defined below) full access to the Franchised Restaurant and all of your books and records at any time during customary business hours in order to conduct inventories and determine the purchase price for the Purchased Assets.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, after Checkersrallys provides an Appraisal Notice to a franchisee, the franchisee has specific obligations regarding the personal property of the Franchised Restaurant. The Appraisal Notice is Checkersrallys's notification of its intent to determine the Agreed Value of the personal property used in the restaurant. This property includes inventory of non-perishable items, materials, supplies, furniture, equipment, and signs, but excludes cash, short-term investments, and items not meeting Checkersrallys's specifications.
Upon receiving the Appraisal Notice, the franchisee is prohibited from selling or removing any of the Franchised Restaurant's personal property from the premises. The franchisee must also grant Checkersrallys (or its assignee), their designated agents, and the Appraiser full access to the restaurant and all relevant books and records during customary business hours. This access is necessary for conducting inventories and determining the purchase price of the Purchased Assets.
These obligations are triggered when Checkersrallys exercises its option to purchase the restaurant's assets upon termination or expiration of the franchise agreement. The franchisee's compliance ensures that Checkersrallys can accurately assess the value of the assets and proceed with the purchase if it chooses to do so. Failure to comply could potentially lead to legal disputes or other complications during the termination or expiration process.