If Checkers acquires a business, is Checkers obligated to convert it to a Checkers Restaurant?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) acquire the assets or ownership interests of one or more businesses providing products and services similar or dissimilar to those provided at Restaurants, and to franchise, license or create similar arrangements with respect to these businesses once acquired, and which businesses we may (at our sole discretion, and without obligation) convert, or allow to be converted, to operations as Checkers Restaurants or Rally's Restaurants using any of the Marks and/or the System, wherever these businesses (or the franchisees or licensees of these businesses) are located or operating (including in the Protected Area, if applicable); and
Source: Item 12 — TERRITORY (FDD pages 57–61)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Checkers has the discretion, but not the obligation, to convert acquired businesses into Checkers restaurants. Specifically, Checkers can acquire businesses providing similar or dissimilar products and services and then decide whether or not to convert them into Checkers or Rally's restaurants. This applies regardless of where these acquired businesses are located, even within a franchisee's protected area.
This policy provides Checkers with significant flexibility in its growth strategy. It allows Checkers to expand its footprint by acquiring existing businesses and potentially converting them to the Checkers brand, but it is not forced to do so. This is important for franchisees to understand because Checkers could acquire a competing business within their territory and choose not to convert it, thus increasing competition without the benefit of the acquired business becoming part of the Checkers system.
For a prospective franchisee, this means that while you may have a protected area, Checkers retains the right to acquire businesses within that area and operate them under a different brand. This could impact your potential customer base and revenue. It is essential to consider this possibility and discuss with Checkers their strategy for acquisitions and conversions in relation to existing franchisees' territories.