From whom must a Checkersrallys franchisee procure a non-disclosure and non-competition agreement if the franchisee is a business entity?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee is a business entity, they must obtain a non-disclosure and non-competition agreement from specific individuals and entities associated with the business. This requirement ensures that confidential information remains protected and that competition with Checkersrallys is restricted.
Specifically, the franchisee must procure these agreements from all owners with at least a ten percent (10%) direct or indirect legal or beneficial ownership interest in the franchisee entity. Additionally, agreements must be obtained from all officers, directors, and managers of the franchisee. This extends to individuals holding equivalent positions in any business entity that directly or indirectly owns and/or controls the franchisee.
The franchisee is responsible for securing these agreements within ten (10) days following the Effective Date of the franchise agreement. If an individual or entity attains any of the aforementioned statuses after the Effective Date, the franchisee has ten (10) days from the date of attainment to procure the agreement. Copies of all executed Non-disclosure and Non-Competition Agreements must be furnished to Checkersrallys within ten (10) days following their execution.