What does 'control' mean in the context of the Checkers Development Agreement's definition of 'Affiliate'?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
"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 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the term 'control' within the definition of 'Affiliate' refers to the power to direct the management and policies of an entity. This power can be exercised directly or indirectly.
This control can be established through various means, including ownership of voting securities or contractual agreements. Essentially, if an individual or entity has the ability to dictate the direction of another entity's operations and decisions, they are considered to be in control.
For a prospective Checkers franchisee, this definition is important because it clarifies the scope of 'Affiliate' in the context of the Development Agreement. It determines which related entities might be bound by certain obligations or restrictions outlined in the agreement. Understanding this definition helps franchisees recognize potential conflicts of interest or competitive issues involving related parties.