Is Checkers obligated by or liable under any agreements made by the franchisee with any third party?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the 2025 Checkers Franchise Disclosure Document, the agreement between Checkers and its franchisees explicitly establishes an independent contractor relationship. This means that neither party is considered an agent, joint venturer, 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 third parties, such as customers, lessors, contractors, and suppliers. This clear separation aims to prevent Checkers from being held liable for the franchisee's obligations and agreements.
Checkers emphasizes that the franchise agreement does not create any fiduciary relationship or any relationship of trust or confidence between Checkers and the franchisee. Checkers retains the right to make decisions and changes to its business operations, even if those decisions may affect a franchisee's interests, provided such actions are not explicitly prohibited by the franchise agreement. This broad discretion underscores the independent nature of the franchise relationship and further protects Checkers from liabilities arising from a franchisee's actions.
However, the FDD also includes addenda for specific states like Maryland, Virginia, and Illinois, which modify certain provisions of the standard franchise agreement to comply with local laws. These modifications primarily concern payment deferrals, termination rights, and waivers, but they do not alter the fundamental independent contractor relationship. Franchisees should carefully review these state-specific addenda to understand how local regulations may impact their rights and obligations. The independent contractor clause is intended to protect Checkers from being liable for agreements made by the franchisee with third parties.