What is the consequence if a Checkersrallys franchisee breaches the non-compete covenant after the franchise agreement terminates?

According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee fails to abide by the post-term non-compete covenants and Checkersrallys obtains enforcement through a judicial or arbitration proceeding, the obligations under the breached covenant will be tolled. This means the time the franchisee is in violation of the covenant will not count towards the original term of the covenant.

Specifically, the non-compete covenant will be tolled during the period(s) of time that the covenant is breached and/or Checkersrallys seeks to enforce it. The covenant will then continue in effect for a period of 2 years after the date of the order enforcing the covenant. This ensures that Checkersrallys can fully realize the benefit of the non-compete agreement, preventing unfair competition from a former franchisee.

This clause protects Checkersrallys's interests in its system, customer base, and brand goodwill by preventing former franchisees from immediately leveraging their knowledge and experience to compete against the franchise. The franchisee acknowledges that Checkersrallys has a protectable legal interest in the System, customers of Restaurants and the goodwill associated with the Marks and that the non-competition covenants are necessary elements to their protection and are an integral part of the Franchise Agreement.