Under what condition does the Landlord agree that the expiration or termination of the Checkersrallys Franchise Agreement constitutes a default under the Lease?

According to Checkersrallys's 2025 Franchise Disclosure Document, the landlord agrees that the expiration or termination of the Franchise Agreement constitutes a default under the lease under specific conditions. Specifically, the expiration of the Franchise Agreement, unless the tenant (franchisee) enters into a renewal Franchise Agreement with Checkersrallys, will be considered a default. Similarly, a termination of the Franchise Agreement prior to its expiration is also considered a default under the lease.

This provision is significant for a prospective Checkersrallys franchisee because it directly ties the lease agreement to the status of the franchise agreement. If the franchisee fails to renew their franchise agreement or if the agreement is terminated early, the landlord recognizes this as a default on the lease. This clause protects Checkersrallys's interests by giving them the right, but not the obligation, to cure the default by stepping in as the new lessee or sublessee.

This arrangement allows Checkersrallys to maintain control over the location, ensuring that the premises can continue to operate as a Checkersrallys restaurant, even if the original franchisee is no longer in the picture. The franchisee should understand that their lease is contingent on maintaining a valid and current franchise agreement with Checkersrallys. Failure to do so could result in the loss of their lease and potentially the business location.