What are the developer's obligations upon termination or nonrenewal of the Checkers Development Agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| i. | Developer's obligations on termination/ nonrenewal | Section 9 | Comply with covenant not to compete |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, a developer's primary obligation upon termination or nonrenewal of the Development Agreement is to comply with the covenant not to compete. This is detailed in Section 9 of the agreement.
Specifically, Section 9.02 states that the developer cannot be involved in any competing business for a period of two years after the agreement is terminated or expires. This restriction applies within the developer's designated Development Area and also extends to within three miles of any other Checkers Restaurant or Rally's Restaurant. This non-compete clause is designed to protect Checkers's market presence and brand integrity by preventing former developers from leveraging their knowledge and resources to benefit a competing business in the same geographic area.
Prospective developers should carefully review Section 9 of the Development Agreement to fully understand the scope and limitations of the non-compete obligations. Understanding these post-termination restrictions is crucial for planning future business ventures and avoiding potential legal conflicts with Checkers.