What agreement must each person who is or becomes an Owner of a Checkersrallys franchise execute, and what obligation does it entail?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Personal Guarantee: Franchisees and all owners must sign a personal guarantee, making you and your spouse individually liable for your financial obligations under the agreement if you are married. The guarantee will place your and your spouse's marital and personal assets at risk if your franchise fails.
You agree to require and obtain the execution of a non-disclosure and non-competition agreement, as we may require at our sole discretion, from all of the following persons:
(a) Before employment or any promotion, your Operating Partner; and,
(b) If you are a business entity, all Owners with at least a ten percent (10%) direct or indirect legal or beneficial ownership interest in you; all of your officers, directors and managers; and, all persons possessing equivalent positions in any business entity which directly or indirectly owns and/or controls you.
You shall procure all such Nondisclosure and
Non-Competition Agreements no later than ten (10) days following the Effective Date (or, if any individual or entity attains any status identified above after the Effective Date, within ten (10) days after such individual or entity's attains such status) and shall furnish to us copies of all executed Nondisclosure and Non-Competition Agreements within ten (10) days following their execution.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees and all owners must sign a personal guarantee. If the franchisee is married, their spouse must also sign the personal guarantee. This guarantee makes the franchisee and their spouse individually liable for the financial obligations under the franchise agreement. This means that if the Checkersrallys franchise fails, the franchisee's and their spouse's marital and personal assets are at risk.
In addition to the personal guarantee, Checkersrallys also requires the execution of a non-disclosure and non-competition agreement from certain individuals. This includes the Operating Partner, and if the franchisee is a business entity, all Owners with at least a ten percent (10%) direct or indirect legal or beneficial ownership interest, all officers, directors, and managers, and all persons possessing equivalent positions in any business entity which directly or indirectly owns and/or controls the franchisee.
The franchisee is responsible for obtaining these Non-disclosure and Non-Competition Agreements within ten (10) days following the Effective Date of the franchise agreement or within ten (10) days after an individual attains a status requiring the agreement. Copies of the executed agreements must be furnished to Checkersrallys within ten (10) days following their execution. These agreements protect Checkersrallys's confidential information and prevent competition during and after the franchise term.