After Checkersrallys acquires a business, can they convert it to a Checkers Restaurant or Rally's Restaurant?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) acquire the assets or ownership interests of one or more businesses providing products and services similar or dissimilar to those provided at Restaurants, and to franchise, license or create similar arrangements with respect to these businesses once acquired, and which businesses we may (at our sole discretion, and without obligation) convert, or allow to be converted, to operations as Checkers Restaurants or Rally's Restaurants using any of the Marks and/or the System, wherever these businesses (or the franchisees or licensees of these businesses) are located or operating (including in the Protected Area, if applicable); and
Source: Item 12 — TERRITORY (FDD pages 57–60)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys has the right to acquire other businesses and convert them into Checkers or Rally's restaurants. Specifically, Checkersrallys can acquire businesses providing similar or dissimilar products and services and then, at their sole discretion, convert these businesses into Checkers or Rally's restaurants. This conversion can involve using Checkersrallys's trademarks and systems, regardless of where these acquired businesses are located, even within a franchisee's protected area.
This clause gives Checkersrallys significant flexibility in expanding its brand presence. It means that Checkersrallys is not restricted from growing through acquisitions and can integrate existing businesses into its franchise system. For a franchisee, this implies potential competition from converted businesses, even within their protected area, although Checkersrallys has no obligation to convert acquired businesses.
It's important to note that Checkersrallys's discretion in converting acquired businesses is absolute, meaning they are not obligated to convert any acquired business to a Checkers or Rally's restaurant. This decision is entirely at Checkersrallys's discretion. This clause also highlights that Checkersrallys retains all rights regarding the Marks and the System, allowing them to operate restaurants under different trademarks or through alternative channels of distribution, further emphasizing the non-exclusive nature of the franchise agreement beyond the limited protected area.