Does Checkersrallys have any restrictions on assigning the Development Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| e. | Termination by franchisor without cause | Not applicable | Not applicable |
| f. | Termination by franchisor with cause | Section 8 | We can terminate only for specified causes (if we terminate, we may also terminate any franchise agreements you have signed with us) |
| g. | "Cause" defined: curable defaults | Section 8.02 | 30 days to cure certain breaches of the Development Agreement. |
| h. | "Cause" defined non-curable defaults | Sections 8.01 and 8.02 | Includes insolvency; failure to meet development schedule; unauthorized transfer; misrepresentations; conviction of a felony; unauthorized disclosure of confidential information; any default by you under a franchise agreement; adverse franchise legislation. |
| i. | Developer's obligations on termination/ nonrenewal | Section 9 | Comply with covenant not to compete |
| j. | Assignment of contract by franchisor | Section 10.08 | No restriction on our right to assign |
| k. | "Transfer" by developer defined | Section 1.04 | Includes transfer of agreement, sale of business and ownership changes. |
| l. | Franchisor's approval of transfer by developer | Sections 7.01 and 7.02 | We have the right to approve all transfers but will not unreasonably withhold approval if conditions satisfied. |
| m. | Conditions for franchisor's approval of transfer | Section 7.02 | You must transfer all of your Restaurants; be in compliance with agreements; have at least one Restaurant open; sign release and non-compete for each transferred restaurant; and do other things we request. Transferee must qualify, sign existing agreement and pay transfer fee; transferee cannot be public company. |
| n. | Franchisor's right of first refusal | Section 7.06 | We can match any offer for your development rights. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys does place restrictions on a developer's ability to assign the Development Agreement. Specifically, Checkersrallys retains the right to approve all transfers, though they will not unreasonably withhold approval if certain conditions are met.
The conditions for approval include the developer transferring all of their restaurants, being in compliance with all agreements, and having at least one restaurant open. Additionally, the developer must sign a release and non-compete agreement for each transferred restaurant and fulfill any other requests made by Checkersrallys. The prospective transferee must also meet certain qualifications, including signing the existing agreement, paying a transfer fee, and not being a public company.
Furthermore, Checkersrallys has the right of first refusal, meaning they can match any offer made for the developer's rights. In the event of the developer's death or disability, the Development Agreement must be assigned by the estate to an approved buyer within nine months. These provisions ensure that Checkersrallys maintains control over who becomes a developer and that transfers meet their standards.