Is a business that grants franchises or licenses to others to operate a restaurant selling hamburgers, cheeseburgers, and hot dogs considered a 'Competitive Business' to Checkers?

According to Checkers' 2025 Franchise Disclosure Document, a business that grants franchises or licenses to others to operate a restaurant selling hamburgers, cheeseburgers, and hot dogs can be considered a 'Competitive Business'.

The FDD defines a 'Competitive Business' as any business that (i) operates as a restaurant or similar food-service provider and derives more than twenty percent (20%) of its revenue from selling hamburgers, cheeseburgers and hot dogs in a fast-food, quick-service, drive-thru or drive-in format; or (ii) grants franchises or licenses to others to operate the type of business specified in subparagraph (i) (other than a "Checkers" or "Rally's"-branded restaurant operated under a franchise agreement with us).

This definition has significant implications for prospective franchisees. It means that during the term of the franchise agreement, a franchisee is restricted from owning, operating, or being involved with any business that meets this definition. This restriction extends to being a proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant of a competitive business. The only exception is owning less than five percent (5%) of a publicly traded company that meets the definition of a 'Competitive Business', provided that neither the franchisee nor an individual controls the company.