What agreement must each person who becomes an Owner of a Checkers franchise execute?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to require and obtain the execution of a non-disclosure and non-competition agreement, as we may require at our sole discretion, from all of the following persons:
(a) Before employment or any promotion, your Operating Partner; and,
(b) If you are a business entity, all Owners with at least a ten percent (10%) direct or indirect legal or beneficial ownership interest in you; all of your officers, directors and managers; and, all persons possessing equivalent positions in any business entity which directly or indirectly owns and/or controls you.
You shall procure all such Nondisclosure and
Non-Competition Agreements no later than ten (10) days following the Effective Date (or, if any individual or entity attains any status identified above after the Effective Date, within ten (10) days after such individual or entity's attains such status) and shall furnish to us copies of all executed Nondisclosure and Non-Competition Agreements within ten (10) days following their execution.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, each Owner with at least a ten percent (10%) direct or indirect legal or beneficial ownership interest in the franchisee business entity must execute a non-disclosure and non-competition agreement. This requirement also extends to all of the franchisee's officers, directors, and managers, as well as individuals holding equivalent positions in any entity that directly or indirectly owns or controls the franchisee.
This agreement aims to protect Checkers' confidential information and competitive interests. It prevents Owners from disclosing sensitive business information or engaging in activities that could harm the Checkers brand. The franchisee is responsible for obtaining these agreements within ten (10) days of the effective date of the franchise agreement or within ten (10) days after an individual or entity attains a status that requires the agreement.
The franchisee must provide Checkers with copies of all executed Non-disclosure and Non-Competition Agreements within ten (10) days of their execution. This ensures that Checkers has a record of all parties bound by these agreements and can enforce them if necessary. This requirement is a standard practice in franchising to safeguard the franchisor's business model and brand reputation.
Additionally, in California, franchisees and all owners must sign a personal guarantee, making them individually liable for financial obligations under the agreement, potentially placing personal assets at risk if the franchise fails. The franchisor is also entitled to a release and covenant not to sue from the franchisee's owners.