Does the Checkersrallys Development Agreement require franchisees to acknowledge they understand the terms of the agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
1. INTRODUCTION.
- 1.01 Restaurants. We own, operate and franchise "Checkers" and "Rally's"-branded restaurants, which feature a limited menu of hamburgers, cheeseburgers, and/or such other menu items as we may authorize at any time and from time to time. We have developed and own a comprehensive System (defined below in Section 1.04).
- 1.02 Your Acknowledgments. You have read this Agreement and our Franchise Disclosure Document. You understand the terms of this Agreement and accept them as being reasonably necessary to maintain the uniformity of our high quality standards at all Restaurants in order to protect and preserve the goodwill of the Marks and the integrity of the System. You have conducted an independent investigation of the business contemplated by this Agreement and recognize that the restaurant industry is highly competitive, with constantly changing market conditions. You recognize that the nature of Restaurants may change over time, that an investment in Restaurants involves business risks and that the success of the venture is largely dependent on your own business abilities, efforts and financial resources. You have not received or relied on: (a) any guaranty or assurance, express or implied, as to the revenues, profits or success of the business venture contemplated by this Agreement; or (b) any promises that any parent company or Affiliate will b
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees must acknowledge that they have read and understand the terms of the Franchise Agreement. Specifically, the FDD states that franchisees acknowledge they have read the agreement and the Franchise Disclosure Document, understand the terms, and accept them as reasonably necessary to maintain the uniformity of Checkersrallys's high-quality standards. Franchisees also acknowledge conducting an independent investigation of the business and recognize the competitive nature and risks of the restaurant industry.
This acknowledgment is crucial as it confirms that the franchisee is entering the agreement with a clear understanding of its obligations, the competitive landscape, and the potential risks involved. By signing the agreement, the franchisee confirms they did not rely on any guarantees or assurances regarding revenues, profits, or success, except for the representations made in the Franchise Disclosure Document. This protects Checkersrallys from potential future claims that the franchisee was misled about the business.
However, in Maryland, any acknowledgments or representations of the franchisee requiring them to assent to a release, estoppel, or waiver of liability are not intended to act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This addendum ensures that franchisees in Maryland retain their rights under state law, regardless of any acknowledgments made in the agreement. This provision provides an additional layer of protection for franchisees in Maryland, ensuring that they cannot inadvertently waive their rights under the Maryland Franchise Registration and Disclosure Law through standard acknowledgments in the franchise agreement.