Under what conditions can the Checkersrallys agreement automatically terminate without notice?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
your Affiliates, regardless of whether such sale or offer would be required to be registered pursuant to the provisions of the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction, without obtaining our prior consent and complying with all of our requirements and restrictions concerning use of information about us and our Affiliates. Under no circumstances may you or any of its Owners issue or sell your securities or any securities of any of your Affiliates if: (a) such securities would be required to be registered pursuant to the Securities Act of 1933, as amended, or such securities would be owned by more than 35 persons; or (b) after such issuance or sale, you or such Affiliate would be required to comply with the reporting and information requirements of the Securities Exchange Act of 1934, as amended.
8. TERMINATION OF THE AGREEMENT.
- 8.01 Immediate Termination. You are in material breach of this Agreement, and this Agreement will automatically terminate without notice, at our discretion, if you become insolvent by reason of your inability to pay your debts as they mature; if you are adjudicated bankrupt or insolvent; if you file a petition in bankruptcy, reorganization or similar proceeding under the bankruptcy laws of the United States or have such a petition filed against you which is not discharged within 30 days; if
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the franchise agreement can automatically terminate without notice if the franchisee is in material breach of the agreement and meets certain conditions related to financial stability and legal standing. Specifically, Checkersrallys can terminate the agreement if the franchisee becomes insolvent due to an inability to pay debts, is adjudicated bankrupt or insolvent, or files for bankruptcy, reorganization, or similar proceedings that are not discharged within 30 days.
Additionally, Checkersrallys can immediately terminate the agreement if a receiver is appointed for the franchisee's business, assets, or property, or if the franchisee requests such an appointment or makes a general assignment for the benefit of creditors. A final judgment against the franchisee of $25,000 or more that remains unsatisfied for 30 days or longer, the attachment of bank accounts, property, or accounts receivable, or the levy of execution against the business or property also constitute grounds for immediate termination.
Further conditions that trigger immediate termination include the filing of a suit to foreclose any lien or mortgage against the franchisee's assets that is not dismissed within 30 days, voluntary dissolution or liquidation, or the filing of a petition for corporate or partnership dissolution that is not dismissed within 30 days. Finally, Checkersrallys can terminate the agreement immediately if the franchisee's assets, property, or interests are "blocked" under laws relating to terrorist activities or if the franchisee violates any such law or regulation. These terms highlight the critical importance of maintaining financial and legal compliance to avoid immediate termination of the Checkersrallys franchise agreement.