What is the purpose of the addendum mentioned in the Checkersrallys franchise agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
" or collectively, the "Parties." | | | | | | | |
R E C I T A L S
| | WHEREAS, Franchisor | | | and Franchisee are Parties to that certain Franchise Agreement | | | | | | |------------|---------------------|----|---|---------------------------------------------------------------------------------------------|------|------|----|---------|----| | | | | | dated of even date herewith (including all related exhibits and attachments, the "Franchise Agreement") pursuant to which Franchisee will operate a franchised "Checkers" or "Rally's" | | | | | | | restaurant | located | at | a | Non-Traditional (the "Franchised Restaurant"); and | Site | with | an | address | of | WHEREAS, the Parties now desire to modify the Franchise Agreement according to the terms and conditions set forth in this Addendum.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
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- Relationship to Franchise Agreement; Recitals. This Addendum shall be annexed to and form a part of the Franchise Agreement. All capitalized terms not otherwise defined in this Addendum shall have the meanings set forth in the Franchise Agreement. Except as modified by this Addendum, the Franchise Agreement remains in full force and effect. Any conflict between the provisions hereof and the Franchise Agreement shall be construed in favor of this Addendum. All references in this Addendum to "Sections," "Subsections," and/or "Exhibits" shall mean the applicable Section(s), Subsection(s), and/or Exhibit(s) of the Franchise Agreement, unless specified otherwise below. The Recitals above are incorporated into this Addendum by reference.
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- Qualifications. You represent, and in connection with signing this Addendum have provided us (or agree to provide promptly upon our request) relevant supporting documentation, that: (a) you are authorized, or will obtain due authorization, to establish and operate a Restaurant within or from the premises of a Non-Traditional Site; and (b) you will remain a franc
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, the purpose of the addendum is to modify the existing franchise agreement based on specific circumstances. Several addenda are described, each serving a distinct purpose. One addendum relates to lease agreements, establishing the franchisee's right to operate at a specific location. Another addendum addresses situations where the franchisee seeks to qualify for and receive incentives related to operating a franchised restaurant.
For franchisees operating at non-traditional sites, an addendum modifies the standard franchise agreement to reflect the specific conditions of these locations. This includes adjustments to fees, such as a $15,000 reduction in the initial franchise fee, and changes to royalty fees, setting them at 2% of net sales. This addendum also clarifies that franchisees at non-traditional sites do not receive territorial protection or exclusivity.
Additionally, an addendum may address a reduced initial franchise fee. If a franchisee transfers the restaurant before opening, or fails to meet specific criteria outlined in the addendum, they may be required to pay back the amount of the initial fee reduction. These addenda ensure that the franchise agreement is appropriately tailored to different situations, providing clarity and addressing specific conditions or incentives offered by Checkersrallys.