Will I receive an exclusive territory in the Development Area under the Checkersrallys Development Agreement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
g development schedules for such restaurants, will be set out in Exhibit A to the Development Agreement (the "Development Schedule").
You will not receive an exclusive territory in the Development Area. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. During the term of the Development Agreement, as long as you and your affiliates are in compliance with the agreement and all other agreements with us or any of our affiliates (including Franchise Agreements signed under the Development Agreement), we will: (a) grant to you, in accordance with Section 3 of the Development Agreement, at least that cumulative number of franchises for Checkers Restaurants or Rally's Restaurants set forth in Exhibit A to the Development Agreement, all of which are to be located within the Development Area (the locations of which we will approve in accordance with our then current criteria for selection of a Checkers Restaurant or Rally's Restaurant site); and (b) not operate (directly or through an affiliate), nor grant the right to operate, any Checkers Restaurants or Rally's Restaurants located within the Development Area, except for: (1) franchises granted pursuant to the Development Agreement; (2) Restaurants open (or under commitment to open) as of the date of the Development Agreement; (3) Checkers Restaurants, Rally's Restaurants or other restaurants using any part or all of the System and/or Marks at Non-Traditional Sites; 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 Restaurants or Rally's 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.
Except as otherwise expressly provided in the Development Agreement, we and all of our affiliates (and our or their respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all of our rights and discretion with respect to the Marks, the System and Restaurants anywhere in the world, and the right to engage in any business whatsoever (without compensation to you), including the right to: (a) operate, and grant to others the right to operate, Restaurants at such locations and on such terms and conditions as we deem appropriate; (b) sell any products or services under the Marks, or under other trademarks, service marks or trade dress, through alternative channels of distribution (including the internet or similar electronic media and supermarkets); (c) operate, and grant to others the right to operate, restaurants identified by trademarks, service marks or trade dress, other than the Marks, under the terms and conditions we deem appropriate; and (d) be acquired (whether through acquisition of assets, ownership interests or otherwise, regardless of the form of transaction), by a business providing products and services similar to those provided at Checkers Restaurants or Rally's Restaurants, or by another business, even if such business operates, franchises and/or licenses Competitive Businesses in the Development Area.
Source: Item 12 — TERRITORY (FDD pages 57–60)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, a franchisee will not receive an exclusive territory in the Development Area. The franchisee may face competition from other franchisees, outlets that Checkersrallys owns, other distribution channels, or competitive brands that Checkersrallys controls. However, as long as the franchisee complies with the Development Agreement, Checkersrallys will grant the franchisee at least the cumulative number of franchises for Checkers or Rally's Restaurants set forth in Exhibit A, all located within the Development Area. Checkersrallys will approve the locations based on their current criteria for site selection.
Checkersrallys will not operate or grant the right to operate any Checkers or Rally's Restaurants within the Development Area, except for franchises granted under the Development Agreement, Restaurants open as of the date of the Development Agreement, Restaurants at Non-Traditional Sites, and restaurants that Checkersrallys purchases that are part of another franchise system or chain. These purchased restaurants may or may not be converted to Checkers or Rally's Restaurants.
The Development Agreement grants the franchisee the right to develop an agreed-upon number of Checkers or Rally's Restaurants within a geographical area described in Exhibit A, known as the Development Area. The size of the Development Area depends on the number of suitable locations, considering factors like population density and the area's character. The number of Restaurants and their opening dates will be detailed in Exhibit A, referred to as the Development Schedule. The franchisee must be developing or operating at least the cumulative number of Restaurants set out in the Development Schedule. Failure to do so is a material breach of the Development Agreement, but Checkersrallys's right to terminate the agreement is the exclusive remedy for this failure.