How is 'control' defined in relation to an 'Affiliate' of Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
1.04 Certain Definitions. The terms listed below have the meanings which follow them and include the plural as well as the singular. Other terms are defined elsewhere in this Agreement in the context in which they arise.
"Affiliate" – Any person or entity that directly or indirectly owns or controls the referenced party, that is directly or indirectly owned or controlled by the referenced party, or that is under common control with the referenced party. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, an 'Affiliate' is any entity that directly or indirectly owns or controls the referenced party, is owned or controlled by the referenced party, or is under common control with the referenced party. The term 'control' specifically means the power to direct the management and policies of an entity. This power can be exercised directly or indirectly, whether through ownership of voting securities, by contract, or other means.
For a prospective Checkers franchisee, this definition is important because it clarifies the scope of Checkers' rights and activities, as well as those of its related entities. Checkers and its Affiliates retain significant rights regarding the brand, system, and restaurant operations, and can engage in various business activities without necessarily benefiting the franchisee.
This definition of 'control' is fairly standard in franchise agreements. It ensures that Checkers has the ability to manage its brand and system effectively across all affiliated entities. Franchisees should be aware that Checkers' Affiliates could potentially operate competing businesses or alternative distribution channels, as Checkers retains broad discretion in these areas.