Under the Checkers franchise agreement, what geographic radius around a Checkers Restaurant does the non-compete clause extend to after termination or expiration of employment, service, association, or ownership participation?
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.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, upon termination of employment, service, association, or ownership participation, an individual is subject to a non-compete agreement. This agreement restricts them from involvement with a Competitive Business.
Specifically, for a period of two years following the termination date, the individual cannot own interest in, render services to, or advise any Competitive Business operating at the premises or within a three-mile radius of the premises. This restriction also applies to any Competitive Business operating within a three-mile radius of any Checkers restaurant in operation or under construction at the time of termination. Furthermore, the individual is prohibited from being involved with any entity that grants franchises or licenses for Competitive Businesses. Immediate family members are also included in this restriction.
This non-compete clause is designed to protect Checkers' confidential information, trademarks, and goodwill. A "Competitive Business" is defined as any restaurant or food-service provider deriving more than 20% of its revenue from selling hamburgers, cheeseburgers, and hot dogs in a fast-food format, or any entity that franchises or licenses others to operate such a business. However, the agreement does allow for passive investments of less than 5% in publicly traded Competitive Businesses, provided that neither the individual nor the franchisee controls the company.