Can Checkers operate and change its system in any manner, even if it affects franchisees?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
"System" – The business methods, designs and arrangements for developing and operating Restaurants, which include the Marks, building designs and layouts, equipment, ingredients, recipes, methods of preparation and specifications for authorized food products, methods of inventory control and certain operating and business standards and policies, all of which we may improve, further develop or otherwise modify at any time and from time to time.
2.03 Our Reservation of Rights. Except as expressly limited by Section 2.02 above, we and our Affiliates (and our respective successors and assigns, by purchase, merger, consolidation or otherwise) 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, within or outside the Protected Area, whenever and wherever we desire. Specifically, by way of example and without limitation, we reserve the following rights: (a) to establish and operate, and grant to others the right to operate, "Checkers" and "Rally's"-branded restaurants at locations outside the Protected Area, on such terms and conditions as we deem appropriate (you acknowledge that such "Checkers" and "Rally's"-branded restaurants may be in direct competition with your Franchised Restaurant, without regard to any adverse effects of such activities on your Franchised Restaurant and without any obligation or liability to you);
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Checkers retains significant rights to modify its business system, which may affect franchisees. Specifically, Checkers reserves the right to modify the 'System,' which includes business methods, building designs, equipment, recipes, and operating standards. These changes can be made at any time and from time to time.
This means Checkers has the authority to update or alter various aspects of the restaurant operations, potentially impacting how franchisees conduct their daily business. These modifications could range from introducing new menu items and changing ingredient specifications to updating building layouts or implementing new technologies. While Checkers has the right to make these changes, franchisees are obligated to adapt to them to maintain uniformity within the Checkers brand.
For a prospective franchisee, this highlights the importance of understanding that the Checkers system is not static. Franchisees must be prepared to invest in updates and adapt to new operational standards as directed by Checkers. While these changes are intended to improve the brand and system, they may also require franchisees to incur additional costs or modify their existing business practices. It is important to note that Checkers also retains rights regarding the Marks, the sale of products and services, and the operation of restaurants, indicating a broad scope of control over the brand and its direction.
Furthermore, Checkers retains the right to establish and operate restaurants that may compete with a franchisee's location, without obligation or liability to the franchisee. This underscores the importance of carefully evaluating the market and potential competition before investing in a Checkers franchise.