Does the Checkersrallys franchise agreement allow Checkersrallys to exercise day-to-day control over the operations of a Checkersrallys franchised restaurant?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
12. INSPECTIONS OF THE FRANCHISED RESTAURANT.
12.01 Inspections.We and our designated agents have the right at any reasonable time and without prior notice to: (a) inspect the Franchised Restaurant; (b) observe, photograph, audio-tape and/or video tape the operations of the Franchised Restaurant; (c) remove samples of any food and beverage products, materials or supplies for testing and analysis; and (d) interview personnel and customers of the Franchised Restaurant. You agree to cooperate fully with such activities. You acknowledge that any evaluation or inspection that we or our designated agents or representatives conduct is conducted in order to protect our interests in the System and the Marks and is not intended to exercise, and does not constitute, in whole or in part, control over the day-to-day operation of the Franchised Restaurant and you agree to never contend otherwise.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, while the franchise agreement does not grant Checkersrallys direct day-to-day control, it does outline several mechanisms to protect their interests in the System and Marks.
The agreement mandates that the Franchised Restaurant be under the direct, on-premises supervision of the franchisee (or their Operating Partner) or an appointed Operator who meets Checkersrallys's experience and training standards. Even if an Operator is appointed, the franchisee must remain active in overseeing the restaurant's business activities. Checkersrallys requires franchisees to keep them informed of the identity of their Operators and ensure their competence. However, franchisees retain sole responsibility for employment decisions, including hiring, firing, and personnel policies.
Checkersrallys retains the right to inspect the restaurant at any reasonable time without prior notice, observe operations, and interview personnel and customers. Franchisees are obligated to cooperate fully with these inspections. While the agreement states that these inspections are not intended to constitute control over day-to-day operations, they provide Checkersrallys with a mechanism to monitor compliance with their standards and protect their brand.
Furthermore, franchisees are required to furnish periodic reports, including bi-weekly sales reports, monthly income statements and cash flow statements, and annual financial statements. Checkersrallys has the right to request other information, such as food and labor cost reports, and can require audited annual financial statements at the franchisee's expense. These reporting requirements enable Checkersrallys to maintain oversight of the financial performance of the franchised restaurant.