For how long after termination or expiration of employment/service/association or ownership participation is an individual prohibited from owning or working for a Competitive Business near a Checkersrallys location?
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.
You acknowledge that we have a protectable legal interest in the System, customers of Restaurants and the goodwill associated with the Marks and that the non-competition covenants contained in this Section and Section 7.02 are necessary elements to their protection and are an integral part of this Agreement. You also expressly acknowledge the possession of skills and abilities of a general nature and the opportunity for exploiting such skills in other ways, so that enforcement of the
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, individuals are subject to a post-term covenant that restricts their involvement with competitive businesses for a period of two years. This restriction begins on the effective date of termination or expiration of their employment, service, association, or ownership participation.
During this two-year period, the individual is prohibited from directly or indirectly owning a legal or beneficial interest in, or rendering services or giving advice to, certain competitive businesses. This includes 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 branded restaurant in operation or under construction on the termination date. Furthermore, the restriction applies to any entity that grants franchises, licenses, or other interests to others to operate any Competitive Business.
This post-term covenant is in place to protect Checkersrallys's interests in its system, customer base, and the goodwill associated with its trademarks. The agreement acknowledges that the non-competition covenants are necessary for this protection and are an integral part of the franchise agreement. It also acknowledges that the individual has general skills and abilities that can be exploited in other ways, making the enforcement of these covenants reasonable.