Does a Checkersrallys franchisee operating at a Non-Traditional Site receive any territorial protection or exclusivity?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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- No Exclusivity or Protected Territory.
Franchisee acknowledges and agrees that it will not receive any territorial protection or exclusivity under this Addendum or the Franchise Agreement when operating the Restaurant at a Non-Traditional Site and that Franchisor and its Affiliates retain all rights and discretion with respect to the Marks, the System, the sale of products and services similar or dissimilar to those offered by "Checkers" and "Rally's"-branded restaurants, and the operation or franchising of "Checkers" and "Rally's"-branded restaurants anywhere located or to be located, and may engage in any business activities whatsoever, whenever and wherever they desire during the Term.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees operating at Non-Traditional Sites do not receive any territorial protection or exclusivity. The document explicitly states that Checkersrallys retains all rights and discretion regarding the brand, system, and sale of similar products and services. This includes the operation or franchising of Checkersrallys restaurants anywhere, without granting the franchisee any exclusive territory.
This lack of exclusivity means that Checkersrallys can establish other franchised or company-owned locations, including those under different brands, that may compete directly with a franchisee's Non-Traditional Site. The franchisor also reserves the right to sell products and services through alternative channels of distribution, such as the internet or supermarkets, which could further impact a franchisee's sales.
For a prospective franchisee, this implies a higher level of risk, as Checkersrallys can open competing locations nearby without violating the franchise agreement. It is crucial for potential franchisees to carefully consider the specific location of the Non-Traditional Site and assess the potential for competition from other Checkersrallys outlets or alternative distribution channels. Understanding the market and potential customer base is essential in this scenario, as the franchisee will not have any protected territory to rely on.