What section number in the Checkers FDD discusses 'Procurement of Additional Covenants'?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.03 Procurement of Additional Covenants.
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.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Section 6.03 discusses the 'Procurement of Additional Covenants.' This section falls under Item 6, which generally covers restrictive covenants.
Section 6.03 specifies that Checkers franchisees must obtain non-disclosure and non-competition agreements from their Operating Partner before employment or promotion. If the franchisee is a business entity, these agreements must be secured from all owners with at least a 10% direct or indirect legal or beneficial ownership interest, as well as all officers, directors, and managers. This requirement extends to individuals in equivalent positions within any entity that directly or indirectly owns or controls the franchisee's business.
These agreements must be procured within ten days of the Effective Date or within ten days of an individual or entity attaining a relevant status. Franchisees are also required to provide Checkers with copies of the executed agreements within ten days of their execution. This ensures that Checkers can enforce these covenants to protect its confidential information, brand, and competitive position.