Under the Checkers franchise agreement, is Checkers required to consider whether other decisions could have been made when exercising its rights?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you acknowledge and agree that this Agreement (and the relationship of the parties which arises from this Agreement) grants us the right to make decisions, take actions and/or refrain from taking actions not inconsistent with your explicit rights and obligations hereunder that may affect favorably or adversely your interests. You understand and agree that we may operate and change the System and our business in any manner that is not expressly and specifically prohibited by this Agreement. Whenever we have reserved in this Agreement a right and/or discretion to take or withhold an action, or to grant or decline to grant you a right to take or withhold an action, except as otherwise expressly and specifically provided in this Agreement, we may make our decision or exercise our right and/or discretion on the basis of our judgment of what is in our best interests, including our judgment of what is in the best interests of our franchise network, at the time our decision is made, without regard to: (a) whether other reasonable or even arguably preferable alternative decisions or actions could have been made by us; (b) whether our decision or the action we take promotes our financial or other individual interest; (c) whether our decision or the action we take applies differently to you and one (1) or more other franchisees; or (d) whether our decision or the exercise of our rights is adverse to your individual interests or the individual interests of any other particular franchisees. We will have no liability to you for any such decision or exercise of our rights.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Checkers retains significant discretion in making decisions that affect franchisees. The franchise agreement explicitly states that Checkers is not obligated to consider alternative decisions when exercising its rights, even if those alternatives might be reasonable or preferable. This means Checkers can prioritize its own interests, including the interests of the broader franchise network, without necessarily considering the individual impact on each franchisee.
This discretion extends to how Checkers operates and changes the system, provided it doesn't violate any explicit terms of the franchise agreement. Checkers can make decisions that affect a franchisee's interests, whether favorably or adversely, and will not be liable for these decisions, even if they benefit Checkers financially or apply differently to various franchisees. This highlights the independent contractor relationship between Checkers and its franchisees, where neither party has a fiduciary duty to the other.
For a prospective franchisee, this underscores the importance of carefully reviewing the franchise agreement to understand the scope of Checkers's decision-making authority. While Checkers's decisions must not be expressly prohibited by the agreement, the company has wide latitude to act in its best interest, which may not always align with the individual franchisee's best interest. This is a common arrangement in franchising, where the franchisor needs flexibility to manage the system as a whole, but it places a greater burden on the franchisee to assess the potential impact of these decisions on their specific business.