Does the Checkers franchise agreement confer any goodwill or other interests in the Marks to the franchisee?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge and agree that, except as expressly granted to you in Section 2.02 hereof, your rights hereunder are non-exclusive and you have no rights under this Agreement to participate in or benefit from any other business activity we or our Affiliate may undertake, regardless of whether such activity involves the Marks or the System. You waive, to the fullest extent permitted under applicable law, all claims, demands, or causes of action arising from or relating to any of the foregoing activities by us or any of our Affiliates in connection with our reserved rights under this Section 2.03.
Franchisee acknowledges and agrees that it will not receive any territorial protection or exclusivity under this Addendum or the Franchise Agreement when operating the Restaurant at a Non-Traditional Site and that Franchisor and its Affiliates retain all rights and discretion with respect to the Marks, the System, the sale of products and services similar or dissimilar to those offered by "Checkers" and "Rally's"-branded restaurants, and the operation or franchising of "Checkers" and "Rally's"-branded restaurants anywhere located or to be located, and may engage in any business activities whatsoever, whenever and wherever they desire during the Term.
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.
I acknowledge and understand that the provisions of this Agreement, including my representations, covenants, and warranties (as applicable) given hereunder, are necessary and integral to this Agreement and to Franchisor's and Franchisee's interests under the Franchise Agreement, and are intended to:
- (i) preclude not only direct competition, but also all forms of indirect competition, such as consultation for Competitive Businesses, service as an independent contractor for Competitive Businesses, or any assistance or transmission of information of any kind which would be of any material assistance to a competitor;
I also expressly acknowledge my possession of skills and abilities of a general nature, and the opportunity for exploiting such skills in other ways than the operation or involvement in the activities of a Restaurant or a Competitive
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, the franchise agreement does not grant franchisees exclusive rights to the brand's goodwill or trademarks, except as expressly stated in the agreement. The franchisee acknowledges that their rights are non-exclusive and they cannot benefit from any other business activity Checkers or its affiliates undertake, even if it involves the Marks or the System. The franchisee waives any claims related to Checkers's business activities. This is further reinforced by the fact that franchisees operating at Non-Traditional Sites do not receive any territorial protection or exclusivity. Checkers retains all rights and discretion regarding the Marks, the System, and the operation or franchising of Checkers restaurants.
This means that Checkers retains significant control over its brand and trademarks, and can operate or franchise other locations, even those that might compete with an existing franchisee, subject to the terms outlined in Section 2.02 of the franchise agreement. The franchisee's success is largely dependent on their own abilities, efforts, and financial resources, as they have conducted an independent investigation of the business and recognize the competitive nature of the restaurant industry. The franchisee also acknowledges that they have not received any guarantees or assurances regarding the revenues, profits, or success of the business venture.
Furthermore, the franchisee acknowledges that their representations, covenants, and warranties are integral to the agreement and are intended to prevent both direct and indirect competition. This includes precluding consultation for competitive businesses or any assistance that would benefit a competitor. The franchisee also recognizes that they possess skills and abilities that can be exploited in ways other than operating a Checkers restaurant, ensuring that the enforcement of covenants will not deprive them of their personal goodwill or ability to earn a living after the termination of their relationship with Checkers.