What representations must a Checkers franchisee and their owners make to the franchisor?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to require and obtain the execution of a non-disclosure and non-competition agreement, as we may require at our sole discretion, from all of the following persons:
(a) Before employment or any promotion, your Operating Partner; and,
(b) If you are a business entity, all Owners with at least a ten percent (10%) direct or indirect legal or beneficial ownership interest in you; all of your officers, directors and managers; and, all persons possessing equivalent positions in any business entity which directly or indirectly owns and/or controls you.
You shall procure all such Nondisclosure and
Non-Competition Agreements no later than ten (10) days following the Effective Date (or, if any individual or entity attains any status identified above after the Effective Date, within ten (10) days after such individual or entity's attains such status) and shall furnish to us copies of all executed Nondisclosure and Non-Competition Agreements within ten (10) days following their execution.
7. AREA FRANCHISEE'S RIGHT TO TRANSFER.
- 7.01 Franchisor's Approval.
Your rights and duties under this Agreement are personal to you and if you are a business corporation, partnership, limited liability company or any other legal entity, your Owners.
Accordingly, neither you nor any of your Owners may Transfer the Development Rights without our prior approval and without complying with the terms and conditions of Section 7.
Any transfer without such approval or compliance constitutes a breach of this Agreement and is void and of no force or effect.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a franchisee must ensure certain individuals sign non-disclosure and non-competition agreements. Specifically, this requirement applies to the Operating Partner before employment or promotion. If the franchisee is a business entity, all owners with at least a 10% direct or indirect legal or beneficial ownership interest, all officers, directors, and managers, and individuals in equivalent positions within any entity that owns or controls the franchisee must also sign these agreements.
Checkers requires that these non-disclosure and non-competition agreements be secured no later than ten days following the Effective Date of the franchise agreement. If an individual attains a relevant status after the Effective Date, the agreement must be obtained within ten days of them attaining that status. The franchisee must provide copies of all executed agreements to Checkers within ten days of their execution.
Additionally, the FDD states that the franchisee's rights and duties under the agreement are personal to them and their owners if the franchisee is a business entity. Therefore, neither the franchisee nor their owners can transfer the development rights granted by the agreement without prior approval from Checkers. Any transfer attempted without this approval is considered a breach of the agreement and is void.