What is the minimum number of Checkersrallys franchises that the franchisor will grant to the franchisee, as specified in Exhibit A?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
2.02 Development Rights. During the Term and provided you and your Affiliates are in compliance with this Agreement and all other agreements with us or any of our Affiliates (including Franchise Agreements signed pursuant to this Agreement), we will: (a) grant to you, in accordance with Section 3, at least that cumulative number of franchises for Restaurants set forth in Exhibit A, all of which are to be located within the geographical area described in Exhibit A (the "Development Area"); and (b) not operate (directly or through an Affiliate), nor grant the right to operate, any "Checkers" or "Rally's"-branded restaurants located within the Development Area, except for: (1) franchises granted pursuant to this Agreement; (2) "Checkers" and "Rally's"-branded restaurants open (or under commitment to open) as of the Effective Date; (3) "Checkers"-branded restaurants, "Rally's"-branded restaurants or other restaurants using any part or all of the System and/or Marks at any sites, locations or venues in the Development Area that independently generate customer traffic flow separate from the general customer traffic flow of the surrounding area, or by their nature are not tied to a particular physical location, including, without limitation: military bases, transportationrelated venues (e.g., airports, train or bus stations, marinas, travel plazas or toll roads), sports or entertainment venues (e.g., stadiums, arenas, concert halls), major industrial or office complexes, hotels, educational facilities (e.g., school, college, and university campuses), casinos, hospitals and related rehabilitation or healthcare facilities, governmental institutions, amusement or recreational facilities (e.g., theme parks, outdoor municipal parks, zoos, or museums), grocery stores or departments stores, mobile-based channels of distribution (e.g., roving food trucks), any co-branding locations or business endeavors where a restaurant's operations are inextricably associated with, or such operations are contained within or sharing the same physical building or operational premises as, another business (such as, for example and without limitation, a gas/convenience store or another restaurant concept), and mobile units located temporarily at special events, such as sports or entertainment events; and (4) restaurants that we purchase (or as to which we purchase the rights as franchisor) that are part of another franchise system or chain, regardless whether such restaurants are converted to operations as "Checkers" or "Rally's"-branded restaurants using any of the Marks and/or the System or whether such restaurants operate under other trademarks, service marks or trade dress and/or use other operating systems.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, the franchisor will grant the franchisee at least the cumulative number of franchises for Restaurants set forth in Exhibit A. These franchises will be located within the geographical area described in Exhibit A, referred to as the "Development Area." This commitment is contingent upon the franchisee and their affiliates complying with the Development Agreement and all other agreements with Checkersrallys or its affiliates, including Franchise Agreements signed pursuant to the Development Agreement.
This commitment is outlined in Section 2.02 of the FDD, which details the franchisor's obligations regarding development rights. It's important to note that Checkersrallys retains the right to operate or grant the right to operate Checkers or Rally's-branded restaurants within the Development Area under specific circumstances. These circumstances include franchises granted pursuant to the Development Agreement, restaurants already open or under commitment to open as of the Effective Date, and restaurants in locations that generate independent customer traffic, such as military bases, transportation venues, or entertainment venues.
Furthermore, Checkersrallys reserves the right to operate or franchise restaurants acquired from other franchise systems or chains, regardless of whether they are converted to Checkers or Rally's-branded restaurants. This reservation of rights ensures that Checkersrallys maintains flexibility in its development strategy and is not unduly restricted by the Development Agreement, except as expressly provided therein. Prospective franchisees should carefully review Exhibit A to understand the specific number of franchises they are entitled to and the geographical boundaries of their Development Area. They should also be aware of the exceptions that allow Checkersrallys to operate or franchise other restaurants within the Development Area.