Under what conditions can the Checkersrallys franchisor terminate the franchise agreement with cause, as defined in the agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY |
|---|---|---|
| o. Franchisor’s option | Not applicable | Not applicable |
| to purchase | ||
| developer’s | ||
| development rights | ||
| p. Death or disability | Section 7.05 | Franchise must be assigned by estate to |
| of developer | approved buyer within nine months. | |
| q. Non-competition covenants during the term of the agreement | Section 6.02 | No involvement in any competing business regardless of its location. |
| r. Non-competition covenants after the agreement is terminated or expires | Section 9.02 | No competing business for 2 years within your Development Area or within 3 miles of any other Checkers Restaurant or Rally's Restaurant. |
| s. Modification of the | Section 10.10 | No modifications except by written |
| agreement | agreement signed by both parties. | |
| t. Integration/merger clause | Section 10.11 | Only terms of Development Agreement are binding (subject to state law); any representations or promises outside the disclosure document and development agreement may not be enforceable. However, nothing in the Development Agreement or any related agreement is intended to disclaim our representations made in this Disclosure Document. |
| u. Dispute resolution by negotiation, mediation & arbitration | Section 10.06 | All claims, disputes and controversies shall be arbitrated on demand by either party. |
| v. Choice of forum | Section 10.05 | If dispute is not arbitrated, then Florida State and Federal courts (subject to state law, see Exhibits I and J). |
| w. Choice of law | Section 10.07 | Subject to state law, Florida law applies generally, except for applicable franchise laws of other states (see Exhibits I and J). |
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | |
| d. | Termination by franchisee | Not applicable |
| e. | Termination by franchisor without cause | Not applicable |
| f. | Termination by franchisor with cause | Section 14 |
| g. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the franchisor can terminate the franchise agreement with cause under specific conditions, as detailed in Section 14 of the agreement. These causes are divided into two categories: defaults that can be cured and non-curable defaults, outlined in Sections 14.01 and 14.02. If Checkersrallys terminates the agreement with a franchisee, Checkersrallys may also terminate any other franchise agreements that franchisee has with them.
For defaults that can be cured, Section 14.02 specifies a process for addressing certain breaches of the Franchise Agreement, though the exact cure period is not specified in this excerpt. This implies that franchisees have an opportunity to rectify certain violations of the agreement to avoid termination.
Non-curable defaults, as defined in Sections 14.01 and 14.02, include serious violations such as insolvency, failure to meet the development schedule, unauthorized transfer of the franchise, misrepresentations made to the franchisor, conviction of a felony, unauthorized disclosure of confidential information, any default by the franchisee under a franchise agreement, and adverse franchise legislation. These defaults are considered severe enough to warrant immediate termination without an opportunity to cure the breach. Prospective franchisees should carefully review Sections 14, 14.01, and 14.02 of the Franchise Agreement to fully understand their obligations and the circumstances that could lead to termination.