What obligations does a Checkersrallys developer have upon termination or nonrenewal of the agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| i. | Developer's obligations on termination/ nonrenewal | Section 9 | Comply with covenant not to compete |
| r. | Non-competition covenants after the agreement is terminated or expires | Section 9.02 | No competing business for 2 years within your Development Area or within 3 miles of any other Checkers Restaurant or Rally's Restaurant. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 66–71)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, a developer's obligations upon termination or non-renewal primarily involve adhering to non-compete covenants. Specifically, Item 17 details that Section 9 of the Development Agreement outlines these obligations. The developer must comply with the covenant not to compete.
Following termination or expiration of the agreement, the developer is restricted from engaging in any competing business for a period of 2 years. This restriction applies within the developer's designated Development Area and also extends to any area within 3 miles of any Checkers Restaurant or Rally's Restaurant. This non-compete clause is designed to protect Checkersrallys's market presence and brand integrity by preventing former developers from leveraging their knowledge and resources to directly compete with the franchise within a specific geographic area.
Prospective developers should carefully review Section 9 of the Development Agreement to fully understand the scope and limitations of the non-compete obligations. Understanding these restrictions is crucial for planning future business ventures after the Checkersrallys agreement ends, ensuring compliance and avoiding potential legal repercussions. It is also important to note that the franchisor can terminate the agreement with cause, which includes failure to meet the development schedule, among other reasons.