Besides franchises granted under the Development Agreement, what are the exceptions to Checkers' promise not to operate or grant franchises within the Development Area?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the Development Agreement, as long as you and your affiliates are in compliance with the agreement and all other agreements with us or any of our affiliates (including Franchise Agreements signed under the Development Agreement), we will: (a) grant to you, in accordance with Section 3 of the Development Agreement, at least that cumulative number of franchises for Checkers Restaurants or Rally's Restaurants set forth in Exhibit A to the Development Agreement, all of which are to be located within the Development Area (the locations of which we will approve in accordance with our then current criteria for selection of a Checkers Restaurant or Rally's Restaurant site); and (b) not operate (directly or through an affiliate), nor grant the right to operate, any Checkers Restaurants or Rally's Restaurants located within the Development Area, except for: (1) franchises granted pursuant to the Development Agreement; (2) Restaurants open (or under commitment to open) as of the date of the Development Agreement; (3) Checkers Restaurants, Rally's Restaurants or other restaurants using any part or all of the System and/or Marks at Non-Traditional Sites; and (4) restaurants that we purchase (or as to which we purchase the rights as franchisor) that are part of another franchise system or chain, regardless whether such restaurants are converted to operations as Checkers Restaurants or Rally's Restaurants using any of the
Source: Item 12 — TERRITORY (FDD pages 57–61)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a Development Agreement grants the franchisee the right to develop an agreed-upon number of Checkers or Rally's restaurants within a specific geographical area. While Checkers agrees not to operate or grant franchises within the Development Area during the agreement's term, there are several exceptions.
Specifically, Checkers retains the right to operate or franchise restaurants within the Development Area under the following conditions: restaurants that were already open or under commitment to open as of the Development Agreement date, Checkers or Rally's restaurants (or other restaurants using the Checkers system or marks) at Non-Traditional Sites, and restaurants that Checkers purchases (or acquires the franchisor rights to) as part of another franchise system or chain, regardless of whether they are converted to Checkers or Rally's restaurants.
These exceptions mean that a Checkers developer's exclusivity is limited. Checkers can still introduce competition within the Development Area through pre-existing restaurants, non-traditional locations, or acquisitions. A prospective franchisee should carefully consider these potential competitive scenarios and how they might impact the profitability of their developed locations.