Under what condition related to bankruptcy might the termination provision in the Checkersrallys Franchise Agreement and Development Agreement not be enforceable?

According to Checkersrallys's 2025 Franchise Disclosure Document, a clause within both the Franchise Agreement and the Development Agreement allows Checkersrallys to terminate the agreement upon the franchisee's bankruptcy. However, this termination provision may not be enforceable due to federal bankruptcy law, specifically 11 U.S.C.A. Sec. 101 et seq.

This means that if a Checkersrallys franchisee declares bankruptcy, the standard termination clause in their agreements might not automatically allow Checkersrallys to terminate the franchise or development agreement. Federal bankruptcy law could override this provision, potentially allowing the franchisee to continue operating under bankruptcy protection.

Prospective franchisees should be aware that the enforceability of the termination clause is subject to the interpretation and application of federal bankruptcy law at the time of any bankruptcy filing. It is advisable to consult with a legal expert to understand the full implications of this provision and how bankruptcy laws might affect their rights and obligations under the Franchise Agreement and Development Agreement.