What is the relationship between Checkersrallys taking a specific action and the franchisee providing a release?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| Checkers Drive-In Restaurants, Inc. ("we," "us," or "our") and the undersigned |
|---|
| franchisee, ("you" or "your"), |
| currently are parties to a certain Franchise Agreement (the "Franchise Agreement") dated |
| You have asked us to take the following action or to agree to |
| the following request: [insert as appropriate for renewal or transfer situation] |
| . We have the right under the Franchise Agreement to obtain a general |
| release from you (and, if applicable, your owners) as a condition of taking this action or |
| agreeing to this request. Therefore, we are willing to take the action or agree to the request |
| specified above if you (and, if applicable, your owners) |
| give us the release and covenant not |
| to sue provided below in this document. You (and, if applicable, your owners) are willing to |
| give us the release and covenant not to sue provided below as partial consideration for our |
| willingness to take the action or agree to the request described above. |
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkers Drive-In Restaurants, Inc. has the right to obtain a general release from the franchisee as a condition of taking a specific action requested by the franchisee or agreeing to a specific request from the franchisee. This means that if a franchisee asks Checkersrallys to take a certain action, such as renewing or transferring the franchise, Checkersrallys can require the franchisee to sign a release and covenant not to sue as a condition of Checkersrallys agreeing to the franchisee's request. The franchisee's willingness to provide this release serves as partial consideration for Checkersrallys's agreement to take the action or grant the request. This release covers any and all claims, damages, demands, causes of action, suits, liabilities, and agreements related to the franchisee's relationship with Checkersrallys. The release extends to Checkersrallys and its officers, directors, shareholders, employees, agents, representatives, affiliated entities, successors, and assigns. The franchisee also agrees not to sue Checkersrallys on any of the claims released.
However, there are some limitations and exceptions to this requirement. For example, in Maryland, the release will not apply to the extent prohibited by the Maryland Franchise Registration and Disclosure Law, and franchisees may still commence a lawsuit against Checkersrallys in Maryland for claims arising under this law, subject to the arbitration obligation under the Franchise Agreement. Similarly, in California, any provision requiring the franchisee to waive specific provisions of the Franchise Investment Law or the Franchise Relations Act is void and unenforceable. Additionally, no disclaimer signed by a franchisee can waive claims of fraud in the inducement or disclaim reliance on statements made by Checkersrallys. In Minnesota, Checkersrallys is prohibited from requiring a general release from the franchisee.
Prospective franchisees should be aware of these release requirements and their implications. While these releases are common in franchising to protect the franchisor from potential future claims, franchisees should carefully review the scope of the release and understand their rights and obligations before signing. It is advisable to seek legal counsel to fully understand the implications of signing a release and to ensure that their rights are protected, especially considering the state-specific exceptions and limitations.