What documents are Checkersrallys franchisees and their Owners and Affiliates required to execute to protect Checkersrallys' rights under the Franchise Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Personal Guarantee: Franchisees and all owners must sign a personal guarantee, making you and your spouse individually liable for your financial obligations under the agreement if you are married. The guarantee will place your and your spouse's marital and personal assets at risk if your franchise fails.
You agree to require and obtain the execution of a non-disclosure and non-competition agreement, as we may require at our sole discretion, from all of the following persons:
(a) Before employment or any promotion, your Operating Partner; and,
(b) If you are a business entity, all Owners with at least a ten percent (10%) direct or indirect legal or beneficial ownership interest in you; all of your officers, directors and managers; and, all persons possessing equivalent positions in any business entity which directly or indirectly owns and/or controls you.
You shall procure all such Nondisclosure and
Non-Competition Agreements no later than ten (10) days following the Effective Date (or, if any individual or entity attains any status identified above after the Effective Date, within ten (10) days after such individual or entity's attains such status) and shall furnish to us copies of all executed Nondisclosure and Non-Competition Agreements within ten (10) days following their execution.
10.14 Area Franchisee's Release. To the full extent permitted by applicable law, Area Franchisee, for itself and on behalf of its Affiliates, and their respective shareholders, directors, officers, limited liability company members, managers and employees, and their respective successors and assigns, and on behalf of Area Franchisee's Owners, hereby (i) releases and forever discharges Franchisor and its Affiliates, and their respective directors,
officers, employees, agents, representatives and attorneys, and their respective successors and assigns, from any and all claims, demands and causes of action, whether known or unknown, of any kind or nature, absolute or contingent, if any at law or in equity, arising prior to or on the date you sign this Agreement, and (ii) agrees that none of them will institute any litigation or other legal action or proceeding, at law or in equity, against Franchisor or its affiliates and their directors, officers, employees, agents, representatives and attorneys, and their respective successors and assigns, directly or indirectly, relating to any claim or demand released under this Section 10.14. Area Franchisee shall take whatever actions are necessary or appropriate to carry out the terms of this release and covenant not to sue upon Franchisor's request. Notwithstanding the foregoing, nothing in this Agreement shall disclaim or require you to waive reliance on any representation we made in our Franchise Disclosure Document (including any of that document's exhibits and amendments) delivered to you, your Owners, Affiliates or representatives. This Section 10.14 shall survive the expiration or termination of this Agreement.
You must sign a general release if you renew or transfer your franchise.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to the 2025 Checkersrallys FDD, franchisees and their owners may be required to sign several documents to protect Checkersrallys' rights. Franchisees and all owners must sign a personal guarantee, making them and their spouse individually liable for the financial obligations under the agreement if they are married. This guarantee places the franchisee's and their spouse's marital and personal assets at risk if the franchise fails.
Additionally, Checkersrallys may require franchisees to obtain a non-disclosure and non-competition agreement from their Operating Partner before employment or promotion. If the franchisee is a business entity, similar agreements may be required from all owners with at least a ten percent direct or indirect legal or beneficial ownership interest, all officers, directors, and managers, and all persons possessing equivalent positions in any business entity which directly or indirectly owns and/or controls the franchisee. These agreements must be procured no later than ten days following the Effective Date or within ten days after an individual or entity attains such status, with copies furnished to Checkersrallys within ten days of execution.
Furthermore, if a franchisee is an Area Franchisee, they must sign an Area Franchisee's Release, releasing Checkersrallys from any and all claims, demands, and causes of action arising prior to or on the date the agreement is signed. This release extends to the Area Franchisee's Affiliates, shareholders, directors, officers, members, managers, employees, successors, and assigns. The Area Franchisee also agrees not to institute any litigation or legal action against Checkersrallys or its affiliates relating to any claim or demand released under this section. Finally, franchisees must sign a general release if they renew or transfer their franchise.