Is a Checkersrallys manager-level employee required to sign a Nondisclosure and Non-Competition Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to require and obtain the execution of our Nondisclosure and Non-Competition Agreement (Exhibit D) from all of the following persons:
- (a) Before employment or any promotion, your Operating Partner; and,
- (b) If you are a business entity, all Owners with at least a ten percent (10%) direct or indirect legal or beneficial ownership interest in you; all of your officers, directors and managers; and, all persons possessing equivalent positions in any business entity which directly or indirectly owns and/or controls you. You shall procure all such Nondisclosure and Non-Competition Agreements no later than ten (10) days following the Effective Date (or, if any individual or entity attains any status identified above after the Effective Date, within ten (10) days after such individual or entity's attains such status) and shall furnish to us copies of all executed Nondisclosure and Non-Competition Agreements within ten (10) days following their execution.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 64–65)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees are required to ensure that certain individuals sign a Nondisclosure and Non-Competition Agreement. Specifically, if the franchisee is a business entity, this requirement extends to all of its officers, directors, and managers. This obligation must be fulfilled no later than ten days following the effective date of the franchise agreement or within ten days of an individual attaining a position as an officer, director, or manager.
This requirement ensures that key personnel within the franchisee's organization are legally bound to protect Checkersrallys's confidential information and refrain from competitive activities. The franchisee is responsible for providing copies of these executed agreements to Checkersrallys within ten days of their signing. This measure is in place to safeguard the franchisor's business interests and maintain uniformity across the franchise system.
For a prospective Checkersrallys franchisee, this means they must be proactive in obtaining these agreements from the specified individuals and promptly submitting them to the franchisor. Failure to comply with this requirement could potentially lead to a breach of the franchise agreement. It is a common practice in franchising to have such agreements in place to protect the franchisor's proprietary information and prevent unfair competition.