Can Checkers establish and operate restaurants at Non-Traditional Sites within the Protected Area?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) establish and operate, and grant to others the right to operate, Restaurants, or other restaurants using any part or all of the System and/or Marks, that are located at or operated from Non-Traditional Sites within or outside the Protected Area;
- (c) sell any products or services under the Marks or under any other trademarks, service marks or trade dress, through alternative channels of distribution, wherever located or operating (including the internet or similar electronic media and supermarkets);
- (d) establish and operate, and grant to others the right to operate, restaurants identified by trademarks, service marks or trade dress, other than the Marks (including the Checkers or Rally's, as is applicable, name and mark), under terms and conditions we deem appropriate and wherever such restaurants are located;
Source: Item 12 — TERRITORY (FDD pages 57–61)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Checkers retains the right to establish and operate restaurants, including those at Non-Traditional Sites, within a franchisee's Protected Area. Specifically, Checkers can operate or franchise Restaurants, or other restaurants using any part or all of the Checkers system and/or marks, that are located at or operated from Non-Traditional Sites within or outside the Protected Area. This means that even if a franchisee has a Protected Area, Checkers can still establish or allow others to establish Checkers restaurants at Non-Traditional Sites within that area.
This is a significant consideration for prospective franchisees as it limits the exclusivity of their Protected Area. While a franchisee may have some geographic protection against traditional Checkers restaurants, this protection does not extend to Non-Traditional Sites. These Non-Traditional Sites could include locations such as airports, universities, or stadiums, which can represent significant business opportunities.
Furthermore, Checkers also retains the right to sell products or services under the Checkers marks through alternative channels of distribution, such as the internet or supermarkets, regardless of location. They can also operate restaurants identified by other trademarks. These rights allow Checkers to explore various avenues for market penetration without being restricted by the Protected Area granted to franchisees. This could impact a franchisee's potential customer base and revenue.
Prospective franchisees should carefully consider the implications of these rights retained by Checkers, especially regarding Non-Traditional Sites and alternative channels of distribution, as they evaluate the potential for their investment and the level of competition they may face, even within their Protected Area. Understanding these limitations is crucial for making an informed decision about investing in a Checkers franchise.