Does the definition of 'Competitive Business' for Checkersrallys include businesses that grant franchises or licenses to others to operate restaurants deriving more than 20% of their revenue from hamburgers, cheeseburgers, or hot dogs?

According to Checkersrallys's 2025 Franchise Disclosure Document, a 'Competitive Business' is defined, in part, as any business that grants franchises or licenses to others to operate restaurants deriving more than 20% of their revenue from selling hamburgers, cheeseburgers, or hot dogs in a fast-food, quick-service, drive-thru or drive-in format. This definition excludes Checkers or Rally's restaurants operated under a franchise agreement with Checkersrallys.

This definition is important because it clarifies the scope of businesses that Checkersrallys considers competitive. This definition helps to define the limitations Checkersrallys places on itself regarding acquisitions. It also defines the limitations Checkersrallys places on other businesses that may acquire Checkersrallys.

However, an exception exists for minor equity ownership. Specifically, owning less than 5% of a publicly traded business entity that meets the description of a 'Competitive Business' does not violate the terms of the franchise agreement. This exception acknowledges that franchisees may have diversified investment portfolios that include minor holdings in other restaurant businesses without necessarily creating a conflict of interest.