Following the termination or expiration of a Checkers development agreement, for how long is the developer prohibited from engaging in a competing business, and within what geographic boundaries does this restriction apply?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY |
|---|---|---|
| o. Franchisor’s option | Not applicable | Not applicable |
| to purchase | ||
| developer’s | ||
| development rights | ||
| p. Death or disability | Section 7.05 | Franchise must be assigned by estate to |
| of developer | approved buyer within nine months. | |
| q. Non-competition covenants during the term of the agreement | Section 6.02 | No involvement in any competing business regardless of its location. |
| r. Non-competition covenants after the agreement is terminated or expires | Section 9.02 | No competing business for 2 years within your Development Area or within 3 miles of any other Checkers Restaurant or Rally's Restaurant. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a developer is subject to a non-compete covenant for two years after the termination or expiration of the development agreement. This restriction prevents the developer from engaging in any competing business within their designated Development Area.
In addition to the Development Area restriction, the non-compete also extends to a 3-mile radius of any other Checkers or Rally's Restaurant. This means that even outside the developer's primary territory, they cannot operate a competing business within 3 miles of an existing Checkers or Rally's location.
The non-compete obligations are outlined in Section 9.02 of the Checkers Development Agreement. Prospective developers should carefully review this section to fully understand the scope and limitations of these restrictions, as they could significantly impact their business options after the agreement ends.