Can the franchisor or its affiliates be approved suppliers for items needed to operate a Checkersrallys franchise?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
You are not required to purchase or lease anything from us or any of our affiliates; however, we and our affiliates can be approved suppliers for items. Currently, we are not an approved supplier for any items except that we may from time to time sell used modular restaurants and restaurant equipment to Checkers and Rally's franchisees. We estimate the initial cost of all of required purchases and leases of goods, services, supplies, fixtures, equipment and inventory to be in excess of 95% of your total initial investment (see Item 7). We estimate the ongoing cost of these required purchases and leases to be in excess of 95% of your total ongoing operating expenses.
We may formulate and modify, at our sole discretion, specifications and standards we impose on franchisees and suppliers. Specifications and standards are issued to franchisees through the Operations Manual (defined below) and to suppliers by written notice. The "Operations Manual" is our confidential operations manual, as we may amend at any time, which may consist of one or more manuals or communications, containing our mandatory and suggested standards, specifications and operating procedures relating to the development and operation of Restaurants and other information relating to your obligations as a franchisee and operator of a Restaurant. The term "Operations Manual" also includes all instructions or communications we or our representatives may transmit to you or a substantial number of franchisees, whether in writing or through other media, concerning aspects or modifications to the System, standards, specifications and operating procedures, including bulletins, emails, limited access intranet sites, videotapes, audio tapes, or any other electronic medium. We attempt to negotiate purchase arrangements with suppliers (including price terms) for the benefit of all Restaurants, including those owned by franchisees. We do not provide material benefits (e.g., renewal or additional franchises) to a franchisee based on his use of designated or approved suppliers.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 39–44)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys and its affiliates can be approved suppliers for items needed to operate a franchise. However, Checkersrallys states that franchisees are not required to purchase or lease anything from them or their affiliates. Currently, Checkersrallys is not an approved supplier for any items except that they may from time to time sell used modular restaurants and restaurant equipment to Checkersrallys franchisees.
Checkersrallys estimates that the initial cost of all required purchases and leases of goods, services, supplies, fixtures, equipment, and inventory exceeds 95% of the franchisee's total initial investment. The ongoing cost of these required purchases and leases is estimated to be in excess of 95% of the total ongoing operating expenses.
Checkersrallys may formulate and modify specifications and standards imposed on franchisees and suppliers at their sole discretion. These specifications and standards are issued to franchisees through the Operations Manual and to suppliers by written notice. Checkersrallys attempts to negotiate purchase arrangements with suppliers, including price terms, for the benefit of all Restaurants, including those owned by franchisees, but does not provide material benefits to a franchisee based on their use of designated or approved suppliers.