Does the Checkersrallys agreement specify that the determination of invalidity of a part of the agreement impairs other parts?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
of Restaurants and the goodwill associated with the Marks and that the non-competition covenants contained in this Section and Section 6.02 are necessary elements to their protection and are an integral part of this Agreement. You and each of your Owners expressly acknowledge the possession of skills and abilities of a general nature and other opportunities for exploiting such skills, so that enforcement of the covenants contained in this Section will not deprive you of your personal goodwill or ability to earn a living. If you fail or refuse to abide by any of the foregoing covenants, and we obtain enforcement in a judicial or arbitration proceeding, the obligations under the breached covenant will be tolled during the period(s) of time that the covenant is breached and/or we seek to enforce it, and will continue in effect for a period of 2 years after the date of order enforcing the covenant.
10. MISCELLANEOUS.
10.01 Severability and Substitution of Provisions. Every part of this Agreement shall be considered severable. If for any reason any part of this Agreement is held to be invalid, that determination shall not impair the other parts of this Agreement. If any covenant herein which restricts competitive activity is deemed unenforceable by virtue of its scope in terms of geographical area, type of business activity prohibited and/or length of time, but could be
rendered enforceable by reducing any part or all of it, you and we agree that it will be enforced to the fullest extent permissible under applicable law and public policy.
If any applicable law requires a greater prior notice of the termination than is required hereunder, a different standard of "good cause" to terminate this Agreement or the taking of some other action not required hereunder, the prior notice, the "good cause" standard and/or the other action required by such law shall be substituted for the comparable provisions hereof.
10.02 Waiver of Obligations. We and you may by written instrument unilaterally waive or reduce any obligation of the other under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the franchise agreement includes a severability clause. This means that if any part of the agreement is deemed invalid, it will not automatically invalidate the remaining portions of the agreement. The remaining parts of the agreement will still be in effect.
However, there is an exception to this general severability. Specifically, the clause that prevents multi-plaintiff, consolidated, or class-wide arbitration proceedings is considered integral to the arbitration procedures. If a court determines that this specific clause is invalid or unenforceable, then the entire first paragraph of Section 10.06, which pertains to arbitration, will be removed from the agreement. In this case, neither Checkersrallys nor the franchisee would be bound to arbitrate the particular dispute.
This exception regarding the arbitration clause could have significant implications for franchisees. It clarifies that Checkersrallys prefers individual arbitration and is willing to forgo arbitration entirely if class-wide arbitration is mandated by law. Prospective franchisees should understand this carve-out and consider its potential impact on dispute resolution.