Does Checkers require franchisees to disclose any direct or indirect legal or beneficial interest in any Competitive Business?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
d financial resources. You have not received or relied on: (a) any guaranty or assurance, express or implied, as to the revenues, profits or success of the business venture contemplated by this Agreement; or (b) any promises that any parent company or Affiliate will back us up financially or otherwise guarantee our performance.
- 1.03 Your Representations. You, and your Owners, if applicable, represent and warrant to us, that: (a) neither you nor any of your Owners has made any untrue statement of any material fact or has omitted to state any material fact in obtaining the rights granted hereunder; (b) neither you nor any of your Owners has any direct or indirect legal or beneficial interest in any business that may be deemed a
Competitive Business, except as otherwise completely and accurately disclosed in your franchise application submitted to us; and (c) the execution and performance of this Agreement will not violate any other agreement to which you or of any of your Owners may be bound. You recognize that we have approved your franchise application in reliance on all of the statements you and your Owners have made in connection therewith.
1.04 Certain Definitions. The terms listed below have the meanings which follow them and include the plural as well as the singular. Other terms are defined elsewhere in this Agreement in the context in which they arise.
"Affiliate" – Any person or entity that directly or indirectly owns or controls the referenced party, that is directly or indirectly owned or controlled by the referenced party, or that is under common control with the referenced party. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise.
"Bi-weekly Period" – Each two (2)-week period starting on Tuesday and continuing through the second Monday thereafter, subject to change by us, and provided that the first Bi-weekly Period in any Fiscal Year shall begin on the first day of our Fiscal Year for that year, regardless of the day in the calendar week upon which that first day falls (currently the Tuesday closest to any December 31st, whether arising in late December of one calendar year or early January of the following calendar year).
"Competitive Business" — Any business that: (i) operates as a restaurant or similar food-service provider and derives more than twenty percent (20%) of its revenue from selling hamburgers, cheeseburgers and hot dogs in a fast-food, quick-service, drive-thru or drive-in format;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, franchisees and their owners must disclose any direct or indirect legal or beneficial interest in any business that may be deemed a Competitive Business. This disclosure must be complete and accurate in the franchise application submitted to Checkers.
During the term of the franchise agreement, franchisees, their owners, and their immediate family members are prohibited from having any direct or indirect controlling or non-controlling ownership interest in a Competitive Business, regardless of its location. An exception exists for equity ownership of less than 5% in a Competitive Business if its stock is publicly traded on a recognized United States stock exchange.
Franchisees must also promptly inform Checkers of any proposed changes to their ownership structure during the franchise term and obtain approval before implementing such changes. Additionally, franchisees must update Exhibit A to reflect any approved changes. Each person who becomes an owner must agree to be bound by the franchise agreement.
These stipulations ensure that franchisees are fully committed to the Checkers brand and system, preventing conflicts of interest and protecting Checkers' market position. Prospective franchisees should carefully review the definition of "Competitive Business" in the franchise agreement and fully disclose any relevant interests to avoid potential issues.