What is the maximum amount a class member could be reimbursed for documented out-of-pocket expenses in the Checkersrallys data breach settlement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
iss both Complaints with prejudice. On August 25, 2021 the Court entered an Order approving the settlement, which requires us to (i) reimburse each class member up to $5,000 for documented out-of-pocket expenses, or (ii) provide $20 in restaurant vouchers to each class member without documented out-of-pocket expenses. In accordance with that Order, notice of the settlement was subsequent
Source: Item 3 — LITIGATION (FDD pages 15–17)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, a settlement was reached in two civil complaints (the Cotter Complaint and the Dinh Complaint) stemming from alleged data breaches. The complaints sought damages related to the failure to secure customer data. As part of the settlement approved on August 25, 2021, Checkersrallys is required to provide compensation to class members.
Specifically, class members who can provide documentation of out-of-pocket expenses related to the data breach are eligible for reimbursement. The maximum reimbursement amount for these documented expenses is $5,000 per class member. Alternatively, class members without documented out-of-pocket expenses are eligible to receive $20 in restaurant vouchers.
This settlement indicates a potential risk for Checkersrallys franchisees related to data security and the associated costs of breaches and settlements. Prospective franchisees should inquire about Checkersrallys's data security measures, insurance coverage for data breaches, and any ongoing or potential future litigation related to data security incidents. Understanding these risks and the franchisor's approach to data protection is a crucial part of due diligence.