Does the existence of a claim against Checkersrallys by a franchisee constitute a defense against the enforcement of Sections 7, 13.02(l), 16.02 or 16.03?

According to Checkersrallys's 2025 Franchise Disclosure Document, any claims a franchisee may have against Checkersrallys will not constitute a defense to Checkersrallys's enforcement of the covenants not to compete under the Franchise Agreement. This means that even if a franchisee believes Checkersrallys has wronged them, they cannot use that as a reason to violate the non-compete clauses of the agreement.

This clause is significant because it protects Checkersrallys's interests in preventing franchisees from using confidential information or competing with the brand after the franchise relationship ends, regardless of any grievances the franchisee may have. The franchisee is still obligated to adhere to the non-compete agreement, and Checkersrallys can pursue legal action to enforce it.

For a prospective franchisee, this means they cannot leverage any claims against Checkersrallys to justify violating the non-compete agreement. If a franchisee has a dispute with Checkersrallys, they must pursue it separately without breaching their contractual obligations regarding competition. This could involve mediation, arbitration, or a lawsuit, but it does not excuse them from complying with the non-compete terms.

This type of clause is relatively common in franchise agreements, as franchisors seek to protect their brand and business model. Franchisees should be aware of this provision and understand that they cannot use claims against the franchisor as a shield against enforcement of the non-compete agreement.