What is the standard of 'good cause' to terminate the Checkersrallys Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:
- (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, "good cause" for termination includes the franchisee's failure to comply with any lawful provision of the franchise agreement. The franchisee must be given written notice of the failure and a reasonable opportunity to cure it, which need not be more than 30 days. This means that Checkersrallys can terminate the franchise agreement if the franchisee violates any lawful term of the agreement and fails to correct the issue within the given timeframe after receiving notice.
This provision is fairly standard in franchising, as it allows the franchisor to protect its brand and system standards. The 30-day cure period provides an opportunity for franchisees to rectify any issues before termination occurs. However, the FDD specifies that the cure period "need not be more than 30 days," meaning Checkersrallys could potentially offer a shorter cure period depending on the specific violation.
It is important for prospective Checkersrallys franchisees to carefully review the franchise agreement to understand what constitutes a "lawful provision" and what actions could lead to termination. Franchisees should also be aware of the potential for shorter cure periods and be prepared to act quickly if they receive a notice of non-compliance from Checkersrallys. Understanding these terms is crucial for maintaining a successful and long-lasting franchise relationship.