What must Checkers Area Franchisees, Owners, and Affiliates do to protect Checkers' rights under the Franchise Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
sequential, special and incidental damages Franchisor incurs as a result of the premature termination of this Agreement regardless of whether or not such damages are reasonably foreseeable. Franchisee acknowledges and agrees that the proximate cause of such damages sustained by Franchisor is Franchisee's act of default and not Franchisor's exercise of its right to terminate. Notwithstanding the foregoing, and except as otherwise prohibited or limited by applicable law, any failure, neglect, or delay of a party to assert any breach or violation of any legal or equitable right
arising from or in connection with this Agreement shall constitute a waiver of such right and shall preclude the exercise or enforcement of any legal or equitable remedy arising therefrom, unless written notice specifying such breach or violation is provided to the other party within twelve (12) months after the later of: (a) the date of such breach or violation; or (b) the date of discovery of the facts (or the date the facts could have been discovered, using reasonable diligence) giving rise to such breach or violation.
18.04 Injunctive Relief. We, as an alternative or supplement to arbitration pursuant to Section 18.05, may obtain in any court of competent jurisdiction any injunctive relief, including temporary restraining orders and preliminary injunctions, against conduct or threatened conduct for which no adequate remedy at law may be available or which may cause us irreparable harm.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Area Franchisees must provide written notice specifying any breach or violation of any legal or equitable right arising from or in connection with the Franchise Agreement to the other party within 12 months after the later of the date of such breach or violation, or the date of discovery of the facts giving rise to such breach or violation. This ensures that neither party waives their rights due to a failure to promptly address any issues.
Furthermore, Area Franchisees must ensure compliance with non-disclosure and non-competition agreements. They need to obtain these agreements from their Operating Partner before employment or promotion. If the franchisee is a business entity, these agreements are required from all owners with at least a ten percent direct or indirect legal or beneficial ownership interest, all officers, directors, and managers, and all persons possessing equivalent positions in any business entity which directly or indirectly owns and/or controls the franchisee. These agreements must be secured no later than ten days following the Effective Date or within ten days after an individual or entity attains any of the aforementioned statuses. Copies of all executed agreements must be furnished to Checkers within ten days following their execution.
These measures are designed to protect Checkers' interests by ensuring that potential breaches are addressed in a timely manner and that individuals with significant influence or access to confidential information are bound by non-disclosure and non-competition obligations. This helps maintain the integrity of the Checkers system and protects its goodwill. Failure to comply with these requirements could result in a waiver of rights or potential legal action.