For how long after the termination or expiration of the Checkersrallys franchise agreement is a franchisee prohibited from engaging in a Competitive Business?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
ably 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;
- (g) immediately cease to use all computer software licensed by us or any of Affiliates and comply with your obligations under any software license agreements; and
- (h) within thirty (30) days after the effective date of termination or expiration, furnish us evidence satisfactory to us of your compliance with the foregoing obligations.
- 16.03 Post-Term Covenants.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, a franchisee is restricted from engaging in a Competitive Business for a period of two years following the termination or expiration of their franchise agreement. Specifically, this two-year period starts on the effective date of the termination or expiration of the franchise.
During this two-year period, the franchisee is prohibited from owning a legal or beneficial interest in, or providing services or advice to, a Competitive Business. This restriction applies directly or indirectly, such as through immediate family members. The restrictions apply to (a) any Competitive Business operating at the Premises or within a three-mile radius of the Premises; (b) any Competitive Business operating within a radius of three 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.
This post-term covenant aims to protect Checkersrallys's interests in its system, customer base, and the goodwill associated with its trademarks. The agreement acknowledges that franchisees possess general skills and opportunities to use those skills in ways other than operating a Checkersrallys or a competitive business. If a franchisee breaches this covenant, the obligations will be tolled during the period of the breach and will continue for two years from the date of the order enforcing the covenant.