What are the post-term covenants that a Checkers franchisee must adhere to after termination or expiration of the franchise agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the expiration or other termination for any reason of my employment, association, service or ownership participation, I agree:
(i) to return immediately to Franchisor or Franchisee, as the case may be, all Confidential Information, and any material(s) containing a subset thereof, in my possession that was utilized, or to which I had access,
- during my employment, association, service or ownership participation;
- (ii) to refrain, beginning upon such expiration or termination and forever thereafter, from any and all contacts with customers of Restaurants for any purpose whatsoever; and
- (iii) for a period of two (2) years, starting on the effective date of termination or expiration of my employment/service/association or ownership participation, to refrain from directly or indirectly (such as through any one or more of my spouse, legally-recognized domestic partner, parents, children or sibling(s) (collectively, "Immediate Family")) owning a legal or beneficial interest in, or render services or give advice to: (a) any Competitive Business operating at the Premises or within a three (3)-mile radius of the Premises; (b) any Competitive Business operating within a radius of three (3) miles of any Restaurant in operation or under construction on the effective date of termination or expiration of my employment/service/association/ ownership participation; or (c) any entity which grants franchises, licenses or other interests to others to operate any Competitive Business.
I acknowledge and understand that the provisions of this Agreement, including my representations, covenants, and warranties (as applicable) given hereunder, are necessary and integral to this Agreement and to Franchisor's and Franchisee's interests under the Franchise Agreement, and are intended to:
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, franchisees face specific obligations upon termination or expiration of their franchise agreement. These post-term covenants are designed to protect Checkers' interests in its brand, system, and confidential information. These covenants begin on the effective date of termination or expiration.
Firstly, franchisees must immediately return all Confidential Information and related materials to Checkers. This includes any information they utilized or had access to during their association with the franchise. Secondly, franchisees must permanently refrain from contacting Checkers' customers for any purpose.
Additionally, for a period of two years, franchisees are restricted from involvement with any Competitive Business. This includes owning a legal or beneficial interest in, rendering services to, or advising such a business. This restriction applies to Competitive Businesses operating at the original franchise premises or within a three-mile radius of it, as well as any Competitive Business within three miles of any other Checkers restaurant in operation or under construction at the time of termination or expiration. The restriction also extends to entities that grant franchises or licenses for Competitive Businesses. The definition of "Immediate Family" includes spouse, legally-recognized domestic partner, parents, children, or siblings.
These covenants are acknowledged by the franchisee as necessary to protect Checkers' legal interests, customers, Confidential Information, and the goodwill associated with its Marks. The franchisee also acknowledges that they possess general skills that can be exploited in ways other than operating a Checkers restaurant, so the enforcement of these covenants will not deprive them of their ability to earn a living.