Can Checkersrallys operate or grant franchises for 'Checkers' or 'Rally's'-branded restaurants within the Development Area, other than those granted to the franchisee?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys retains some rights to operate or franchise 'Checkers' or 'Rally's' restaurants within the franchisee's Development Area. While Checkersrallys agrees not to operate or grant the right to operate any 'Checkers' or 'Rally's'-branded restaurants within the Development Area, there are several exceptions.
Specifically, Checkersrallys can grant franchises pursuant to the Development Agreement, and can continue operating or franchising any 'Checkers' and 'Rally's'-branded restaurants that were already open or under commitment to open as of the Effective Date of the agreement. Checkersrallys can also operate or franchise 'Checkers'-branded restaurants, 'Rally's'-branded restaurants or other restaurants using any part or all of the System and/or Marks at locations that generate customer traffic independently from the surrounding area. These include venues such as military bases, transportation hubs, sports and entertainment venues, industrial complexes, hotels, educational facilities, casinos, hospitals, governmental institutions, amusement parks, grocery stores, mobile food trucks, co-branding locations, and temporary mobile units at special events.
Furthermore, Checkersrallys retains the right to purchase restaurants that are part of another franchise system or chain and may or may not convert them to 'Checkers' or 'Rally's'-branded restaurants. These exceptions significantly impact the exclusivity a franchisee might expect in their Development Area, as Checkersrallys retains considerable latitude to operate or franchise other restaurants, especially in non-traditional venues or through acquisitions.