What is the geographic radius restriction, in miles, for a Competitive Business under the Checkersrallys non-compete agreement after termination or expiration of involvement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two (2) years, starting on the effective date of termination or expiration (without renewal or extension of the franchise term) of this Agreement, you are prohibited from directly or indirectly (such as through an Immediate Family member) owning a legal or beneficial interest in, or render services or give advice to: (a) any Competitive Business operating at the Premises or within a three (3)-mile radius of the Premises; (b) any Competitive Business operating within a radius of three (3) miles of any "Checkers" or "Rally's" branded restaurant in operation or under construction on the effective date of termination or expiration; or (c) any entity which grants franchises, licenses or other interests to others to operate any Competitive Business.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the post-term non-compete agreement restricts involvement with a Competitive Business within a specific radius. For a period of two years after the termination or expiration of the franchise agreement, a franchisee is prohibited from owning or being involved with a Competitive Business.
Specifically, this restriction applies to any Competitive Business operating at the premises or within a three-mile radius of the premises. It also extends to any Competitive Business operating within a three-mile radius of any Checkers or Rally's restaurant that is in operation or under construction at the time of termination or expiration. This means that a former franchisee cannot operate or be affiliated with a competing business near their former location or near any existing Checkersrallys location.
This non-compete agreement also includes a restriction on involvement with any entity that grants franchises or licenses to others to operate a Competitive Business. This prevents a former franchisee from circumventing the non-compete by becoming involved in franchising a competing concept. The restrictions apply to direct and indirect involvement, including through immediate family members.