Is a manager-level employee at Checkers required to own equity in the franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchised Restaurant at all times must be under the direct, on-premises supervision of you (or your Operating Partner), or otherwise a manager-level employee other than you (or your Operating Partner) that you appoint and authorize to conduct day-to-day business activities at the Franchised Restaurant, either of whom must (a) have sufficient experience (in our sole opinion) in the operation of a quick service restaurant; and (b) have successfully completed our initial training program to our satisfaction. Your Operating Partner will be required to sign our Nondisclosure and Non-Competition Agreement, but we do not require manager-level employees to sign our Nondisclosure and Non-Competition Agreement. Your manager-level employee is not required to own equity in you.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 64–65)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, a manager-level employee is not required to own equity in the franchise. However, if the franchisee is a business entity such as a corporation or LLC, they must designate an Operating Partner who owns at least 10% of the equity and voting rights. This Operating Partner must also have the authority to make operational decisions and complete the Checkers training program.
The FDD clarifies that while the Operating Partner (if applicable) must meet certain equity requirements and sign a Nondisclosure and Non-Competition Agreement, these requirements do not extend to manager-level employees. The franchisee or Operating Partner must directly supervise the restaurant, but they can appoint a manager-level employee to oversee day-to-day activities. This manager must have sufficient experience in quick-service restaurants and complete Checkers's initial training program.
This distinction is important for prospective franchisees because it provides flexibility in staffing. Franchisees are not obligated to offer equity to their managers, which can simplify the management structure and reduce potential conflicts of interest. The focus remains on ensuring that the restaurant is properly managed and supervised, whether by the franchisee, an Operating Partner with equity, or a trained manager-level employee.