Does the Checkersrallys Development Agreement require the franchisee to disclose any direct or indirect legal or beneficial interest in any business that may be deemed a Competitive Business?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.03 Your Representations. You and your Owners, if applicable, represent and warrant to us that: (a) neither you nor any of your Owners have made any untrue statement of any material fact or have omitted to state any material fact in obtaining the rights granted hereunder; (b) neither you nor any of your Owners have any direct or indirect legal or beneficial interest in any business that may be deemed a Competitive Business, except as otherwise fully and accurately disclosed in your franchise application submitted to us; and (c) the execution and performance of this Agreement will not violate any other agreement to which you or any of your Owners may be bound. You recognize that we have approved your franchise application in reliance on all of the statements you and your Owners have made in connection therewith.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees and their owners must disclose any direct or indirect legal or beneficial interest in any business that may be considered a Competitive Business. Specifically, before Checkersrallys approves the franchise application, the franchisee and their owners must fully and accurately disclose this information. Checkersrallys states that it approves franchise applications based on the statements made by the franchisee and their owners.
This requirement ensures that Checkersrallys is aware of any potential conflicts of interest or competitive activities that the franchisee or their owners may be involved in. A "Competitive Business" would likely include any other quick-service restaurant, especially those specializing in similar menu items like hamburgers and cheeseburgers.
This disclosure allows Checkersrallys to assess the franchisee's commitment to the brand and the potential risk of divided loyalties. Franchisees should ensure they provide complete and accurate information during the application process to avoid any issues later on. Failing to disclose such interests could lead to a breach of the franchise agreement.