Under what conditions can Checkersrallys terminate a franchise agreement before its expiration?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.02 Termination Upon Notice.
In addition to our right to terminate pursuant to other provisions of this Agreement or under applicable law, we may terminate this Agreement, effective upon delivery of notice of termination to you:
(a) if you fail to meet any part of the Development Schedule;
(b) if you or any of your Owners or Affiliates make an unauthorized transfer of the Development Rights;
(c) if you or any of your Owners or Affiliates make any material misstatement or omission in the application for the development rights conferred by this Agreement or in any other information provided to us, or 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;
(d) if you or any of your Owners or Affiliates make any unauthorized use or disclosure of the Confidential Information;
(e) if you or any of your Owners or Affiliates fail to comply with any other provision of this Agreement and do not correct such failure within 30 days after written notice of such failure to comply is delivered to you;
(f) if you or any of your Owners or Affiliates are in breach of any Franchise Agreement or other agreement with us or our Affiliates such that we or our Affiliates have the right to terminate the Franchise Agreement or such other agreement, whether or not we or they elect to exercise such right of termination; or
(g) if we determine that any applicable federal or state legislation, regulation or rule, which is enacted, promulgated or amended after the Effective Date, may have an adverse effect on our rights, remedies or discretion in franchising Restaurants.
We have no obligation whatsoever to refund any portion of the development fee upon any termination, except that we will refund the unapplied portion of the development fee paid pursuant to Section 2.01 in the event of a termination pursuant to Section 8.02(g).
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, Checkersrallys can terminate the franchise agreement before its expiration under several conditions. These include failing to meet any part of the Development Schedule, making an unauthorized transfer of the Development Rights, or making any material misstatement or omission in the application for development rights. Additionally, Checkersrallys can terminate the agreement if the franchisee, their owners, or affiliates are convicted of a felony or other crime that Checkersrallys reasonably believes may adversely affect the goodwill associated with the Marks..
Further reasons for termination include unauthorized use or disclosure of Confidential Information, failure to comply with any other provision of the Agreement without correcting it within 30 days after written notice, or breach of any Franchise Agreement or other agreement with Checkersrallys or its Affiliates. Checkersrallys also reserves the right to terminate if any applicable federal or state legislation, regulation, or rule enacted or amended after the Effective Date may adversely affect their rights, remedies, or discretion in franchising Restaurants.
It is important to note that Checkersrallys has no obligation to refund any portion of the development fee upon termination, except for the unapplied portion of the development fee paid if the termination occurs due to adverse effects from new or amended legislation, regulation, or rule. Prospective franchisees should carefully review these termination conditions and consider the potential financial implications, especially regarding the development fee, before entering into a franchise agreement with Checkersrallys.