Under what circumstances might Checkersrallys choose not to impose Early Termination Damages?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
The imposition of Early Termination Damages shall be at our sole option. We are not required to impose Early Termination Damages and may, in addition or in lieu thereof, pursue other remedies available to us under the terms and conditions of this Agreement, in equity or at law in the event of your breach under this Agreement, including, without limitation, actual damages we incur, if such can be ascertained. All such remedies shall be cumulative and non-exclusive
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the decision to impose Early Termination Damages rests solely with Checkersrallys. While the franchise agreement outlines how these damages are calculated (based on average monthly royalty and advertising fees multiplied by the remaining months in the term), Checkersrallys retains the option not to enforce them. This provides Checkersrallys with flexibility in handling breaches of contract.
Checkersrallys may choose not to impose Early Termination Damages and instead pursue other available remedies. These alternative remedies could include seeking actual damages incurred due to the breach, if they can be accurately determined, or pursuing equitable relief through legal means. This implies that Checkersrallys might forgo the standard liquidated damages calculation if they believe they can recover a greater amount by proving actual financial losses or by seeking a court order to compel specific actions from the franchisee.
This clause benefits Checkersrallys by allowing them to choose the most advantageous course of action in the event of a franchisee's breach. For a prospective franchisee, this means that even if the franchise agreement is terminated early due to a breach, the franchisee might not automatically be subject to Early Termination Damages. However, it also means that Checkersrallys could pursue other, potentially more costly, legal avenues depending on the circumstances of the breach.