Does the Checkers FDD specify any dependencies related to the contract?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchise "Checkers" and "Rally's"-branded restaurants, which feature a limited menu of hamburgers, cheeseburgers, hot dogs and/or such other menu items as we may authorize at any time and from time to time. We have developed and own a comprehensive System (defined below in Section 1.04) for developing and operating Restaurants.
- 1.02 Your Acknowledgments. You have read this Agreement and our Franchise Disclosure Document. You understand the terms of this Agreement and accept them as being reasonably necessary to maintain the uniformity of our high quality standards at all Restaurants in order to protect the goodwill of the Marks and the integrity of the System. You have conducted an independent investigation of the business contemplated by this Agreement and recognize that the restaurant industry is highly competitive, with constantly changing market conditions. You recognize that the nature of Restaurants may change over time, that an investment in a Restaurant involves business risks and that the success of the venture is largely dependent on your own business abilities, efforts and financial resources. You have not received or relied on: (a) any guaranty or assurance, express or implied, as to the revenues, profits or success of the business venture contemplated by this Agreement; or (b) any promises that any parent company or Affiliate will back us up financially or otherwise guarantee our performance.
- 1.03 Your Representations. You, and your Owners, if applicable, represent and warrant to us, that: (a) neither you nor any of your Owners has made any untrue statement of any material fact or has omitted to state any material fact in obtaining the rights granted hereunder; (b) neither you nor any of your Owners has any direct or indirect legal or beneficial interest in any business that may be deemed a
Competitive Business, except as otherwise completely and accurately disclosed in your franchise application submitted to us; and (c) the execution and performance of this Agreement will not violate any other agreement to which you or of any of your Owners may be bound. You recognize that we have approved your franchise application in reliance on all of the statements you and your Owners have made in connection therewith.
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.
"Bi-weekly Period" – Each two (2)-week period starting on Tuesday and continuing through the second Monday thereafter, subject to change by us, and provided that the first Bi-weekly Period in any Fiscal Year shall begin on the first day of our Fiscal Year for that year, regardless of the day in the calendar week upon which that first day falls (currently the Tuesday closest to any December 31st, whether arising in late December of one calendar year or early January of the following calendar year).
"Competitive Business" — Any business that: (i) operates as a restaurant or similar food-service provider and derives more than twenty percent (20%) of its revenue from selling hamburgers, cheeseburgers and hot dogs in a fast-food, quick-service, drive-thru or drive-in format; or (ii) grants franchises or licenses to others to operate the type of business specified in subparagraph (i) (other than a "Checkers" or "Rally's"-branded restaurant operated under a franchise agreement with us).
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers FDD, the franchise agreement's validity is contingent on certain acknowledgments and representations made by the franchisee. Specifically, the franchisee acknowledges having read the agreement and the Franchise Disclosure Document, understanding and accepting the terms as reasonably necessary to maintain uniformity and protect the goodwill of the Checkers brand. The franchisee also confirms conducting an independent investigation of the business and recognizes the risks involved, understanding that success depends on their own abilities and resources. These acknowledgments are crucial, as Checkers relies on them to ensure the franchisee is fully aware of the obligations and risks associated with the franchise.
Furthermore, the franchisee represents and warrants that all statements made in obtaining the franchise rights are true and accurate, and that they do not have any undisclosed interests in any competitive businesses. They also warrant that entering into the agreement does not violate any other agreements they may be bound by. Checkers relies on these representations when approving the franchise application, making them a critical component of the contractual relationship. Any misrepresentation or omission could potentially jeopardize the agreement.
Additionally, for franchisees operating at Non-Traditional Sites, an addendum to the Franchise Agreement exists. This addendum states that the franchisee will not receive any territorial protection or exclusivity. The addendum also contains the entire understanding of the parties, superseding any prior agreements, and can only be altered in writing executed by both parties. This addendum highlights that the rights and obligations of the franchisee can vary based on the location type, adding another layer of dependency to the contract.
Finally, a Rider to the Franchise Agreement exists for use in California, Indiana, Michigan, Rhode Island, and Wisconsin. This Rider states that no statement signed by the franchisee can waive claims under state franchise law or disclaim reliance on statements made by Checkers. This provision supersedes any other term in any document executed in connection with the franchise. This ensures that franchisees in these states retain certain legal protections, adding a state-specific dependency to the franchise agreement.