What are the specific obligations of a Checkers franchisee regarding the management of their employees, considering both Item 8 and Item 9?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| OBLIGATION | SECTION IN AGREEMENT | DISCLOSURE DOCUMENT ITEM |
|---|---|---|
| q. Owners’ participation/ management/staffing | Sections 8.03, 9.06 and Section 4.02, 4.03 and Exhibit B of the Development Agreement | Item 15 |
If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate as the "Operating Partner" an individual approved by us who must: (a) own and control, or have the right to own and control (subject to conditions reasonably acceptable to us), not less than 10% of your equity and voting rights; (b) have the authority to bind you regarding all operational decisions with respect to your Franchised Restaurant; and (c) have completed our training program to our satisfaction. You may not change the Operating Partner without our prior written consent.
You (or your Operating Partner): (a) shall exert your full-time and best efforts to the development and operation of your Franchised Restaurant and all other Restaurants you own; and (b) may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise may conflict with your obligations under the Franchise Agreement. Your Franchised Restaurant at all times must be managed by you (or your Operating Partner) or by a manager who has completed our training program to our satisfaction.
The Franchised Restaurant at all times must be under the direct, on-premises supervision of you (or your Operating Partner), or otherwise a manager-level employee other than you (or your Operating Partner) that you appoint and authorize to conduct day-to-day business activities at the Franchised Restaurant, either of whom must (a) have sufficient experience (in our sole opinion) in the operation of a quick service restaurant; and (b) have successfully completed our initial training program to our satisfaction. Your Operating Partner will be required to sign our Nondisclosure and Non-Competition Agreement, but we do not require manager-level employees to sign our Nondisclosure and Non-Competition Agreement. Your manager-level employee is not required to own equity in you.
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, franchisees have several obligations related to the management and staffing of their restaurants. Item 9 outlines these obligations, referencing specific sections within the franchise agreement.
As detailed in Item 15, if the franchisee is a business entity, they must designate an Operating Partner who meets Checkers' approval. This Operating Partner must own or have the right to control at least 10% of the equity and voting rights, possess the authority to make operational decisions, and complete Checkers' training program. The franchisee or Operating Partner is required to dedicate their full-time efforts to the restaurant's operation and cannot engage in other conflicting business activities. The restaurant must always be managed by the franchisee (or the Operating Partner) or a trained manager.
Furthermore, the restaurant must have on-premises supervision by the franchisee (or Operating Partner) or a manager-level employee authorized to handle day-to-day activities. This supervisor must have sufficient quick-service restaurant experience and complete Checkers' initial training. While the Operating Partner must sign a Nondisclosure and Non-Competition Agreement, manager-level employees are not required to do so, nor are they required to own equity in the franchise.
These obligations ensure that Checkers restaurants are consistently managed by qualified individuals who are committed to the brand's standards and operations. Franchisees should carefully review Sections 8.03 and 9.06 of the Franchise Agreement, Section 4.02 and 4.03 and Exhibit B of the Development Agreement, and Item 15 of the FDD for a complete understanding of their responsibilities regarding management and staffing.