factual

Does the Checkersrallys agreement create any relationship of trust or confidence between the franchisor and franchisee?

Checkersrallys Franchise · 2025 FDD

Answer from 2025 FDD Document

5.01 Independent Contractors. Neither this Agreement nor the dealings of the parties pursuant to this Agreement shall create any fiduciary relationship or any other relationship of trust or confidence. Franchisor and Area Franchisee, as between themselves, are and shall be independent contractors.

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.

Nothing contained in this Agreement, or arising from the conduct of the parties hereunder, is intended to make either party a general or special agent, joint venturer, partner or employee of the other for any purpose whatsoever. You must conspicuously identify yourself in all dealings with customers, lessors, contractors, suppliers, public officials, personnel and others as the owner of development rights granted hereunder and must place such other notices of independent ownership on such forms, business cards, stationery, advertising and other materials as we require at any time and from time to time.

Source: Item 23 — RECEIPTS (FDD pages 92–384)

What This Means (2025 FDD)

According to Checkersrallys's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that the relationship between Checkersrallys and its franchisees is that of independent contractors, and the agreement does not create any fiduciary relationship or any other relationship of trust or confidence. This means that Checkersrallys is not legally obligated to act in the franchisee's best interest.

The agreement grants Checkersrallys the right to make decisions that may affect the franchisee's interests, whether favorably or adversely. Checkersrallys may operate and change the system and its business in any manner not expressly prohibited by the agreement. When Checkersrallys has the right to take or withhold action, it may base its decision on its judgment of what is in its best interests, including the interests of its franchise network.

Checkersrallys is not liable to the franchisee for any decision it makes or any exercise of its rights, even if other reasonable alternatives exist, the decision promotes Checkersrallys's financial interest, the decision applies differently to different franchisees, or the decision is adverse to the franchisee's individual interests. The agreement also clarifies that neither party is considered a general or special agent, joint venturer, partner, or employee of the other. Franchisees must identify themselves as independent owners in all dealings.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.