In the Checkers Development Agreement, what is the meaning of the term 'Effective Date'?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Development Agreement ("Agreement") is made and entered into by and between | |
|---|---|
| CHECKERS DRIVE-IN RESTAURANTS, INC. ("Franchisor", "we" or "us"), a Delaware | |
| corporation, with its principal place of business located at 4300 West Cypress Street, Suite 600, | |
| Tampa, Florida 33607 and | ("Area |
| Franchisee" or "you"), a(n) | |
| address is | , as of |
| the date signed by us and set forth opposite our signature on this Agreement (the "Effective | |
| Date"). |
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the Effective Date in the Development Agreement refers to the date the agreement is signed by Checkers. This date is set forth opposite Checkers' signature on the agreement.
The Effective Date is a critical reference point in the Development Agreement because it triggers several obligations and timelines for the franchisee. For instance, the term of the agreement starts on the Effective Date, as does the clock for procuring non-disclosure and non-competition agreements from the franchisee's operating partner and owners with at least a 10% interest in the franchise. These agreements must be obtained no later than ten days following the Effective Date.
Furthermore, the Effective Date is relevant to post-termination covenants. For a period of two years following the termination or expiration of the Development Agreement, the franchisee is restricted from engaging in any Competitive Business within the Development Area or near any Checkers or Rally's-branded restaurant. This restriction begins on the effective date of termination or expiration of the agreement. Therefore, understanding the Effective Date is crucial for a Checkers franchisee to track their obligations and restrictions under the Development Agreement.