Under what circumstances related to legislation or regulation can Checkersrallys terminate the agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
-(g) if we determine that any applicable federal or state legislation, regulation or rule, which is enacted, promulgated or amended after the Effective Date, may have an adverse effect on our rights, remedies or discretion in franchising Restaurants.
We have no obligation whatsoever to refund any portion of the development fee upon any termination, except that we will refund the unapplied portion of the development fee paid pursuant to Section 2.01 in the event of a termination pursuant to Section 8.02(g).
- Termination of Agreement. Sections 8.01 and 8.02 shall be amended by adding the following:
"Franchisee may terminate this Agreement on any grounds available by law under the provisions of Article 33 of the General Business Law of the State of New York."
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys can terminate the franchise agreement if any applicable federal or state legislation, regulation, or rule, enacted, promulgated, or amended after the effective date of the agreement, may have an adverse effect on Checkersrallys's rights, remedies, or discretion in franchising restaurants.
This provision means that if new laws or changes to existing laws make it more difficult or less desirable for Checkersrallys to franchise restaurants, they can terminate the agreement with a franchisee. This could include changes in regulations related to labor, food safety, or franchise operations that significantly impact Checkersrallys's ability to operate or enforce its franchise agreements.
However, Checkersrallys will refund the unapplied portion of the development fee paid if the termination occurs due to such legislative or regulatory changes. This offers some financial protection to the franchisee, as they will not lose the entire development fee if the agreement is terminated for this reason. Franchisees in New York also have additional protections under Article 33 of the General Business Law of the State of New York, allowing them to terminate the agreement on any grounds available by law under those provisions.