In exercising its rights and discretion, must Checkersrallys consider whether its decision applies differently to different franchisees?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you acknowledge and agree that this Agreement (and the relationship of the parties which arises from this Agreement) grants us the right to make decisions, take actions and/or refrain from taking actions not inconsistent with your explicit rights and obligations hereunder that may affect favorably or adversely your interests. You understand and agree that we may operate and change the System and our business in any manner that is not expressly and specifically prohibited by this Agreement. Whenever we have reserved in this Agreement a right and/or discretion to take or withhold an action, or to grant or decline to grant you a right to take or withhold an action, except as otherwise expressly and specifically provided in this Agreement, we may make our decision or exercise our right and/or discretion on the basis of our judgment of what is in our best interests, including our judgment of what is in the best interests of our franchise network, at the time our decision is made, without regard to: (a) whether other reasonable or even arguably preferable alternative decisions or actions could have been made by us; (b) whether our decision or the action we take promotes our financial or other individual interest; (c) whether our decision or the action we take applies differently to you and one (1) or more other franchisees; or (d) whether our decision or the exercise of our rights is adverse to your individual interests or the individual interests of any other particular franchisees. We will have no liability to you for any such decision or exercise of our rights.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys retains significant discretion in its decision-making processes and is not obligated to ensure uniform application of its decisions across all franchisees. The agreement explicitly states that Checkersrallys may make decisions based on its judgment of what is in its best interests and the best interests of its franchise network.
Specifically, Checkersrallys is not required to consider whether alternative decisions could be preferable, whether its decisions promote its own financial interests, or whether its decisions affect franchisees differently. This means Checkersrallys can make choices that benefit the overall system or the company itself, even if those choices might negatively impact individual franchisees or create disparities among them.
This broad discretionary power granted to Checkersrallys could present both opportunities and risks for franchisees. On one hand, it allows Checkersrallys to adapt to changing market conditions and implement strategies that could benefit the entire network. On the other hand, it means that franchisees have limited recourse if Checkersrallys makes decisions that are detrimental to their individual businesses, as long as those decisions are not expressly prohibited by the franchise agreement.