Can Checkersrallys be acquired by a business that operates competitive businesses in my Development Area?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise expressly provided in the Development Agreement, we and all of our affiliates (and our or their respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all of our rights and discretion with respect to the Marks, the System and Restaurants anywhere in the world, and the right to engage in any business whatsoever (without compensation to you), including the right to: (a) operate, and grant to others the right to operate, Restaurants at such locations and on such terms and conditions as we deem appropriate; (b) sell any products or services under the Marks, or under other trademarks, service marks or trade dress, through alternative channels of distribution (including the internet or similar electronic media and supermarkets); (c) operate, and grant to others the right to operate, restaurants identified by trademarks, service marks or trade dress, other than the Marks, under the terms and conditions we deem appropriate; and (d) be acquired (whether through acquisition of assets, ownership interests or otherwise, regardless of the form of transaction), by a business providing products and services similar to those provided at Checkers Restaurants or Rally's Restaurants, or by another business, even if such business operates, franchises and/or licenses Competitive Businesses in the Development Area.
Source: Item 12 — TERRITORY (FDD pages 57–60)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys retains the right to be acquired by a business providing similar products or services, even if that business operates competitive businesses in your Development Area. This means that a company that directly competes with your Checkersrallys franchise in your designated area could potentially acquire Checkersrallys.
This clause protects Checkersrallys's ability to pursue acquisition opportunities without being restricted by the presence of competing businesses within a franchisee's Development Area. For a prospective franchisee, this means that the competitive landscape in their Development Area could change significantly if Checkersrallys is acquired by a competitor. The new ownership could alter business practices, marketing strategies, or even the brand itself, potentially impacting the franchisee's operations and profitability.
It is important for potential Checkersrallys franchisees to understand that Checkersrallys maintains the right to be acquired by another business, regardless of whether that business is a competitor operating in the franchisee's Development Area. This lack of control over potential ownership changes is a risk factor that prospective franchisees should carefully consider. Franchisees should inquire about Checkersrallys's long-term strategic plans and potential acquisition scenarios to better assess the stability and future direction of the franchise system.