What must a Checkersrallys franchisee do upon termination or expiration (without renewal) of the Franchise Agreement regarding the use of marks and confidential information?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
nchise agreement to acquire a future successor franchise as we then prescribe.
16. EFFECT OF TERMINATION OR EXPIRATION.
16.01 Payment of Amounts Owed to Us.
Within thirty (30) days after the effective date of termination or expiration (without renewal) of this Agreement, you must pay us and our Affiliates all royalties, NPF contributions, amounts owed for purchases from us or our Affiliates, interest due on any of the foregoing and all other amounts owed to us or our Affiliates which are then unpaid.
16.02 Discontinue Use of Marks and Confidential Information.
Upon the termination or expiration (without renewal) of this Agreement, you will:
- (a) not directly or indirectly at any time or in any manner use any Mark, any colorable imitation or other indicia of a Restaurant;
- (b) take such action as may be required to cancel all fictitious or assumed name registrations relating to your use of any Mark;
- (c) notify the telephone company and all telephone directory publishers of the termination or expiration of your right to use any telephone number and any regular, classified or other telephone directory listings associated with any Mark and to authorize transfer of the number to us or at our direction;
- (d) if we do not exercise our right to purchase the Franchised Restaurant pursuant to Section 16.04, promptly remove from the Premises, and discontinue using for any purpose, all signs, fixtures, furniture, decor items, advertising materials, forms and other materials and supplies which display any of the Marks or any distinctive features, images, or designs associated with Restaurants and, at your expense, make such alterations as may be necessary (and as we may require) to
distinguish the Premises so clearly from its former appearance as a Restaurant and from other Restaurants as to prevent any possibility of confusion by the public. If you fail to de-identify the Premises and the Franchised Restaurant to our specifications, you must reimburse us for our losses and expenses if we and our personnel are required to do so on your behalf;
- (e) immediately cease to use all Confidential Information and return to us all copies of Operations Manual and any other confidential materials which have been provided to you;
- (f) immediately discontinue any mode of communications on the Internet directly or indirectly relating to your Franchised Restaurant, including any Web sites or pages associated with your Franchised Restaurant, and immediately take all steps required by us to transfer any domain name associated with your Franchised Restaurant to us (such as executing a Registrant Name Change Agreement with the applicable Registrar). You irrevocably appoint the person who is then our president as your duly authorized agent and attorney-in-fact to execute all instruments and take all steps to transfer such domain names;
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, upon termination or expiration without renewal of the Franchise Agreement, a franchisee must discontinue all use of Checkersrallys's marks and confidential information. Specifically, the franchisee cannot use any mark or imitation of a Checkersrallys restaurant. The franchisee must cancel any assumed name registrations related to the use of Checkersrallys's marks and notify the phone company and directory publishers about the termination of their right to use any phone number associated with Checkersrallys, authorizing the transfer of the number to Checkersrallys.
If Checkersrallys does not buy the franchised restaurant, the franchisee must remove all signs, fixtures, furniture, decor, advertising, and other materials displaying Checkersrallys's marks and alter the premises to clearly distinguish it from a Checkersrallys restaurant to avoid public confusion. Failure to do so allows Checkersrallys to make the changes at the franchisee's expense. The franchisee must also cease using all confidential information, return all copies of the Operations Manual, and any other confidential materials.
Furthermore, the franchisee must discontinue any internet communications related to the franchised restaurant, including websites, and transfer any associated domain names to Checkersrallys. The franchisee must also stop using any computer software licensed by Checkersrallys or its affiliates and comply with software license agreements. Within 30 days of termination or expiration, the franchisee must provide evidence of compliance with these obligations to Checkersrallys. These measures ensure that the franchisee no longer represents or operates as a Checkersrallys location after the agreement ends.