Under what conditions can the Checkersrallys franchise agreement be immediately terminated without notice?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
14.02 Termination Upon Notice.In addition to our right to terminate pursuant to other provisions of this Agreement and under applicable law, we have the right to terminate this Agreement, effective upon delivery of notice of termination to you, if you or any of your Owners or Affiliates:
- (a) fail to locate, and submit for our approval, an acceptable site for the Premises, as provided in Section 3.02;
- (b) fail to sign a lease, sublease or purchase contract for the Premises, as provided in Section 3.03;
- (c) fail to open the Franchised Restaurant and start business, as provided in Section 3.04;
- (d) abandon or fail to actively operate the Franchised Restaurant for three (3) consecutive days, except where such failure to actively operate results solely from events constituting force majeure;
- (e) surrender or transfer control of the operation of the Franchised Restaurant without our prior consent;
- (f) make any material misstatement or omission in an application for a Restaurant franchise or in any other information provided to us;
- (g) suffer cancellation or termination of the lease or sublease for the Franchised Restaurant;
- (h) are convicted of, or plead no contest to, a felony or other crime or offense that we reasonably believe may adversely affect the goodwill associated with the Marks;
- (i) make an unauthorized Transfer of the Franchise or fail to Transfer the Franchise or the interest of a deceased or disabled principal Owner of Franchisee as herein required;
- (j) make any unauthorized use or disclosure of any Confidential Information or use, duplicate or disclose any portion of Operations Manual in violation of this Agreement;
- (k) fail to maintain the insurance we require and do not correct the failure within ten (10) days after we deliver written notice of that failure to you;
fail or refuse to comply with any mandatory specification, standard or operating procedure prescribed by us in this Agreement or in Operations Manual relating to the cleanliness or sanitation of the Franchised Restaurant or violate any health, safety or sanitation law, ordinance or regulation and do not correct such failure or refusal within twenty-four (24) hours after written notice thereof is delivered to you;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
The 2025 Checkersrallys Franchise Disclosure Document outlines specific conditions under which the franchise agreement can be terminated with notice. According to Item 22, Checkersrallys can terminate the agreement if the franchisee or their owners/affiliates fail to meet certain obligations or engage in prohibited conduct.
Specifically, Checkersrallys may terminate the agreement if the franchisee fails to locate an acceptable site, fails to sign a lease, or fails to open the restaurant as agreed. Abandoning the restaurant for three consecutive days (excluding force majeure events), transferring control without consent, or making misstatements in the franchise application are also grounds for termination. Criminal convictions that could harm the brand's goodwill, unauthorized franchise transfers, or misuse of confidential information can also lead to termination.
Furthermore, failure to maintain required insurance and not correcting it within ten days of notice, or failing to comply with cleanliness standards and not rectifying it within 24 hours of notice, can result in termination. These stipulations highlight the importance of adhering to Checkersrallys's operational standards and contractual obligations to maintain the franchise agreement. Franchisees should carefully review these conditions to understand their responsibilities and avoid potential termination.