Does Checkersrallys offer an exclusive territory to franchisees?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
nchise Agreement does not provide you with any options, rights of first refusal or similar rights to acquire additional franchises.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands we control. However, you may receive a limited protected area, as follows: we will not operate (directly or through an affiliate), or grant to a third party the right to operate, any Checkers Restaurant or Rally's Restaurant located within the particular geographic area identified in Exhibit B attached to the Franchise Agreement (the "Protected Area"). The Protected Area, as defined by us, will be the lesser of: (i) a one (1) mile radius from the center of the Premises if your Franchised Restaurant is located in a suburban or rural area or (ii) an area immediately surrounding the Premises that encompasses a population of 20,000 residents if your Franchised Restaurant is located in an urban area. We do not provide a Protected Area to franchisees that operate Restaurants from Non-Traditional Sites.
Except for the rights we expressly grant you under the Franchise Agreement, we and all of our affiliates (and our respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all of our rights and discretion with respect to the Marks, the System, Restaurants anywhere in the world, and the right to engage in any business whatsoever (without compensation to you), including the rights to:
(a) establish and operate, and grant to others the right to operate,
Restaurants at locations outside the Protected Area, on terms and conditions we deem appropriate;
- (b) establish and operate, and grant to others the right to operate, Restaurants, or other restaurants using any part or all of the System and/or Marks, that are located at or operated from Non-Traditional Sites within or outside the Protected Area;
- (c) sell any products or services under the Marks or under any other trademarks, service marks or trade dress, through alternative channels of distribution, wherever located or operating (including the internet or similar electronic media and supermarkets);
- (d) establish and operate, and grant to others the right to operate, restaurants identified by trademarks, service marks or trade dress, other than the Marks (including the Checkers or Rally's, as is applicable, name and mark), under terms and conditions we deem appropriate and wherever such restaurants are located;
- (e) acquire the assets or ownership interests of one or more businesses providing products and services similar or dissimilar to those provided at Restaurants, and to franchise, license or create similar arrangements with respect to these businesses once acquired, and which businesses we may (at our sole discretion, and without obligation) convert, or allow to be converted, to operations as Checkers Restaurants or Rally's Restaurants using any of the Marks and/or the System, wherever these businesses (or the franchisees or licensees of these businesses) are located or operating (including in the Protected Area, if applicable);
Source: Item 12 — TERRITORY (FDD pages 57–60)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees will not receive an exclusive territory. However, Checkersrallys may grant a limited protected area. This protected area will be the lesser of a one-mile radius from the center of the premises if the restaurant is in a suburban or rural area, or an area immediately surrounding the premises encompassing a population of 20,000 residents if the restaurant is in an urban area. Franchisees operating from Non-Traditional Sites will not receive a Protected Area.
Checkersrallys retains the right to operate or franchise other Checkers or Rally's restaurants outside the Protected Area. They can also operate restaurants, including those using the Checkersrallys system or marks, at Non-Traditional Sites, even within the Protected Area. Checkersrallys can sell products and services under their marks through alternative channels of distribution like the internet or supermarkets, regardless of location. They can also acquire other businesses, even those that compete with Checkersrallys, and potentially convert them to Checkersrallys restaurants, even within a franchisee's Protected Area.
Checkersrallys also does not provide exclusivity in Delivery Areas if a franchisee participates in their optional Delivery Program. Checkersrallys, other franchisees, and/or Delivery Service Providers (DSPs) may provide delivery or catering services from other Checkers and/or Rally's restaurants and advertise under the Marks within and outside of the Delivery Areas, even to customers near a franchisee's restaurant, including in their Protected Area, if any.
Checkersrallys may modify the Protected Area during the term of the agreement, reducing it to encompass a geographic area immediately surrounding the premises consisting of a population of 20,000 residents. If the population in the Protected Area drops below 20,000 residents, Checkersrallys has no obligation to expand the area. The continuation of exclusivity in the Protected Area is not dependent upon achieving a certain sales volume, market penetration or other contingency.