Following the effective date of a Checkers franchise transfer, for how long are the franchisee (and their Immediate Family) prohibited from engaging in activities proscribed in Section 16.03?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (l) you (and your Immediate Family) will not, for two (2) years beginning on the transfer's effective date, engage in any of the activities proscribed in Section 16.03 below;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a franchisee and their immediate family are restricted from certain activities for a period of two years following the effective date of a franchise transfer. Specifically, they are prohibited from engaging in activities outlined in Section 16.03 of the franchise agreement.
Section 16.03, as described in the FDD, details post-term covenants. These covenants prevent the franchisee (and their Immediate Family) from having a legal or beneficial interest in, rendering services to, or giving advice to a Competitive Business. This restriction applies to Competitive Businesses operating at the franchise location or within a three-mile radius of any Checkers or Rally's restaurant in operation or under construction. It also extends to any entity that grants franchises or licenses to others to operate a Competitive Business.
This non-compete agreement is in place to protect Checkers' interests in its system, customer base, and the goodwill associated with its trademarks. The agreement acknowledges that Checkers has a protectable legal interest in these aspects of the business. The franchisee acknowledges that they possess general skills and abilities that can be exploited in other ways, making the non-competition covenants a necessary element for Checkers' protection.