Under what conditions can Checkersrallys terminate the agreement with cause?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| f. | Termination by franchisor with cause | Section 8 | We can terminate only for specified causes (if we terminate, we may also terminate any franchise agreements you have signed with us) |
| g. | "Cause" defined: curable defaults | Section 8.02 | 30 days to cure certain breaches of the Development Agreement. |
| h. | "Cause" defined non-curable defaults | Sections 8.01 and 8.02 | Includes insolvency; failure to meet development schedule; unauthorized transfer; misrepresentations; conviction of a felony; unauthorized disclosure of confidential information; any default by you under a franchise agreement; adverse franchise legislation. |
| f. | Termination by franchisor with cause | Section 14 | |
| g. | "Cause" defined: defaults which can be cured | Section 14.02 | |
| h. | "Cause" defined non-curable defaults | Sections 14.01 and 14.02 |
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, Checkersrallys can terminate the franchise agreement with cause under specific conditions, as detailed in Section 14 of the Franchise Agreement. These causes are further defined as either curable defaults (Section 14.02) or non-curable defaults (Sections 14.01 and 14.02). For curable defaults, the franchisee typically has a period to correct the breach.
Non-curable defaults, on the other hand, represent more severe violations of the agreement. While the specific examples of non-curable defaults are not listed in this excerpt, they generally include serious breaches such as insolvency, failure to meet development schedules, unauthorized transfers, misrepresentations, a felony conviction, unauthorized disclosure of confidential information, any default under a franchise agreement, or adverse franchise legislation.
Additionally, if Checkersrallys terminates a Development Agreement with a developer for cause, Checkersrallys may also terminate any franchise agreements the developer has signed with them, according to Section 8 of the Development Agreement. This highlights the interconnectedness of the agreements and the potential ramifications of a default.
Prospective franchisees should carefully review Sections 14.01 and 14.02 of the Franchise Agreement, as well as Section 8 of the Development Agreement, to fully understand what constitutes a curable and non-curable default and the implications of such defaults, as these sections are critical in understanding the circumstances under which Checkersrallys can terminate the agreement with cause.