Can Checkersrallys make decisions that affect the franchisee's interests, even adversely, if not inconsistent with the franchisee's explicit rights and obligations?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you acknowledge and agree that this Agreement (and the relationship of the parties which arises from this Agreement) grants us the right to make decisions, take actions and/or refrain from taking actions not inconsistent with your explicit rights and obligations hereunder that may affect favorably or adversely your interests. You understand and agree that we may operate and change the System and our business in any manner that is not expressly and specifically prohibited by this Agreement. Whenever we have reserved in this Agreement a right and/or discretion to take or withhold an action, or to grant or decline to grant you a right to take or withhold an action, except as otherwise expressly and specifically provided in this Agreement, we may make our decision or exercise our right and/or discretion on the basis of our judgment of what is in our best interests, including our judgment of what is in the best interests of our franchise network, at the time our decision is made, without regard to: (a) whether other reasonable or even arguably preferable alternative decisions or actions could have been made by us; (b) whether our decision or the action we take promotes our financial or other individual interest; (c) whether our decision or the action we take applies differently to you and one (1) or more other franchisees; or (d) whether our decision or the exercise of our rights is adverse to your individual interests or the individual interests of any other particular franchisees. We will have no liability to you for any such decision or exercise of our rights.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys retains the right to make decisions and take actions that may affect a franchisee's interests, whether favorably or unfavorably, as long as those decisions and actions are consistent with the franchisee's explicit rights and obligations under the franchise agreement. This means that Checkersrallys has broad discretion in operating and changing the franchise system.
Checkersrallys can make these decisions based on its judgment of what is in its best interests, including the best interests of its franchise network. This includes decisions that may differently affect franchisees or be adverse to a franchisee's individual interests. Checkersrallys is not liable to the franchisee for such decisions or actions.
This clause highlights the importance of carefully reviewing the franchise agreement to understand the scope of Checkersrallys's decision-making authority and the franchisee's rights. While Checkersrallys cannot violate the explicit terms of the agreement, it has significant leeway to make changes to the system and its business that could impact a franchisee's operations and profitability. Prospective franchisees should consider this when evaluating the franchise opportunity and assess their comfort level with Checkersrallys's level of control.