Is Checkers liable for any representations made by the Checkers franchisee to any third party?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
5. RELATIONSHIP OF THE PARTIES.
5.01 Independent Contractors. Neither this Agreement nor the dealings of the parties pursuant to this Agreement shall create any fiduciary relationship or any other relationship of trust or confidence. Franchisor and Area Franchisee, as between themselves, are and shall be independent contractors.
We and you acknowledge and agree that this Agreement (and the relationship of the parties which arises from this Agreement) grants us the right to make decisions, take actions and/or refrain from taking actions not inconsistent with your explicit rights and obligations hereunder that may affect favorably or adversely your interests. You understand and agree that we may operate and change the System and our business in any manner that is not expressly and specifically prohibited by this Agreement. Whenever we have reserved in this Agreement a right and/or discretion to take or withhold an action, or to grant or decline to grant you a right to take or withhold an action, except as otherwise expressly and specifically provided in this Agreement, we may make our decision or exercise our right and/or discretion on the basis of our judgment of what is in our best interests, including our judgment of what is in the best interests of our franchise network, at the time our decision is made, without regard to: (a) whether other reasonable or even arguably preferable alternative decisions or actions could have been made by us; (b) whether our decision or the action we take promotes our financial or other individual interest; (c) whether our decision or the action we take applies differently to you and one (1) or more other franchisees; or (d) whether our decision or the exercise of our rights is adverse to your individual interests or the individual interests of any other particular franchisees. We will have no liability to you for any such decision or exercise of our rights.
Nothing contained in this Agreement, or arising from the conduct of the parties hereunder, is intended to make either party a general or special agent, joint venturer, partner or employee of the other for any purpose whatsoever. You must conspicuously identify yourself in all dealings with customers, lessors, contractors, suppliers, public officials, personnel and others as the owner of development rights granted hereunder and must place such other notices of independent ownership on such forms, business cards, stationery, advertising and other materials as we require at any time and from time to time.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the agreement between Checkers and its franchisees explicitly states that they are independent contractors. This means that neither party is considered an agent, partner, or employee of the other for any purpose. Franchisees are required to identify themselves as the owners of their development rights in all dealings with customers, lessors, contractors, suppliers, public officials, and personnel. They must also include notices of independent ownership on forms, business cards, stationery, advertising, and other materials as required by Checkers.
This independent contractor relationship is a common arrangement in franchising. It is designed to protect the franchisor from liabilities arising from the franchisee's actions. By ensuring franchisees are recognized as independent business owners, Checkers aims to avoid being held responsible for their representations or misrepresentations to third parties. This separation helps to maintain the integrity of the Checkers brand while allowing franchisees to operate their businesses with a degree of autonomy.
However, it is important for prospective franchisees to understand the full scope of their responsibilities and potential liabilities as independent business owners. While Checkers is not liable for the franchisee's representations, the franchisee is responsible for ensuring that all statements and claims made about the business are accurate and compliant with applicable laws and regulations. Franchisees should consult with legal counsel to fully understand their obligations and to ensure they are adequately protected from potential liabilities.