Can Checkersrallys grant to others the right to operate Restaurants from Non-Traditional Sites within or outside the Protected Area?

According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys retains the right to grant others the ability to operate restaurants, including those at Non-Traditional Sites, regardless of whether these sites are within or outside a franchisee's Protected Area. This means that even if a franchisee has a Protected Area, Checkersrallys can still authorize other Checkersrallys restaurants, or even alternative restaurant concepts utilizing the Checkersrallys system or trademarks, to operate at Non-Traditional Sites within that Protected Area. This is a key aspect for potential franchisees to consider, as it directly impacts the exclusivity and potential market share within their defined territory.

This right extends beyond just Checkersrallys restaurants. Checkersrallys reserves the right to establish and operate, and grant to others the right to operate, restaurants identified by different trademarks, service marks, or trade dress, other than the Checkersrallys marks, under terms and conditions Checkersrallys deems appropriate, irrespective of location. Furthermore, Checkersrallys can sell products or services under the Checkersrallys marks through alternative channels of distribution, such as the internet or supermarkets, without restriction. These activities can occur wherever these channels operate, including within a franchisee's Protected Area.

For a prospective franchisee, this means that the Protected Area offers limited protection. While Checkersrallys agrees not to operate or franchise traditional Checkersrallys restaurants within the Protected Area (subject to certain conditions and modifications), they retain considerable freedom to introduce competing or alternative concepts and distribution methods. This could potentially dilute a franchisee's market share and revenue within their territory. It is important to note that Checkersrallys does not offer a Protected Area to franchisees that operate Restaurants from Non-Traditional Sites.

Therefore, potential franchisees should carefully evaluate the definition and limitations of the Protected Area, understanding that Checkersrallys retains significant rights to operate and franchise other businesses, including those that may compete directly or indirectly with the franchisee's restaurant. Understanding the potential impact of these retained rights is crucial for assessing the overall viability and profitability of a Checkersrallys franchise.