Can Checkers operate restaurants using the Checkers system at Non-Traditional Sites within the Development Area?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the Development Agreement, as long as you and your affiliates are in compliance with the agreement and all other agreements with us or any of our affiliates (including Franchise Agreements signed under the Development Agreement), we will: (a) grant to you, in accordance with Section 3 of the Development Agreement, at least that cumulative number of franchises for Checkers Restaurants or Rally's Restaurants set forth in Exhibit A to the Development Agreement, all of which are to be located within the Development Area (the locations of which we will approve in accordance with our then current criteria for selection of a Checkers Restaurant or Rally's Restaurant site); and (b) not operate (directly or through an affiliate), nor grant the right to operate, any Checkers Restaurants or Rally's Restaurants located within the Development Area, except for: (1) franchises granted pursuant to the Development Agreement; (2) Restaurants open (or under commitment to open) as of the date of the Development Agreement; (3) Checkers Restaurants, Rally's Restaurants or other restaurants using any part or all of the System and/or Marks at Non-Traditional Sites; and (4) restaurants that we purchase (or as to which we purchase the rights as franchisor) that are part of another franchise system or chain, regardless whether such restaurants are converted to operations as Checkers Restaurants or Rally's Restaurants using any of the
Source: Item 12 — TERRITORY (FDD pages 57–61)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Checkers retains the right to operate restaurants using the Checkers system at Non-Traditional Sites within a Development Area. This means that even if a franchisee has a Development Agreement for a specific area, Checkers can still open or allow others to open Checkers restaurants at Non-Traditional Sites within that same area.
This is significant for potential franchisees because it clarifies that the Development Agreement does not grant exclusive rights within the Development Area. Franchisees may face competition from Non-Traditional Checkers locations, which could impact their potential customer base and revenue. Non-Traditional Sites are not defined in this section, so a prospective franchisee should seek clarification from Checkers on what constitutes a Non-Traditional Site.
Checkers also retains the right to sell products or services under the Checkers marks through alternative channels of distribution, such as the internet or supermarkets, within or outside the Protected Area. Furthermore, Checkers can operate restaurants with different trademarks, service marks, or trade dress, other than the Checkers marks, under terms and conditions they deem appropriate. These rights allow Checkers to explore various business avenues without being restricted by franchisee territories.
In addition, Checkers has the right to acquire businesses that offer similar products and services and convert them into Checkers restaurants, even within a franchisee's Protected Area. This clause emphasizes that Checkers maintains broad discretion over the expansion and operation of the Checkers brand, which could lead to increased competition for franchisees.