Can Checkersrallys reduce or modify the size of a franchisee's Protected Area during the Term?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
However, we may during the Term, at our sole option and upon providing notice to you, reduce or otherwise modify the size and/or boundaries of the Protected Area to encompass a geographic area immediately surrounding the Premises consisting of a population of 20,000 residents. If at any time during the Term the population in the Protected Area becomes less than 20,000 residents, we have no obligation to expand or modify the size and/or boundaries of the Protected Area to include a greater population. Upon any modification to the size and/or boundaries of the Protected Area pursuant to the Franchise Agreement, we are authorized to amend Exhibit B to the Franchise Agreement to reflect the modification. Upon the amendment of Exhibit B of the Franchise Agreement by us, the particular geographic area identified in Exhibit B will be deemed the Protected Area under the Franchise Agreement.
Source: Item 12 — TERRITORY (FDD pages 57–60)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys has the option to modify a franchisee's Protected Area during the term of the agreement. Checkersrallys can reduce or modify the size and/or boundaries of the Protected Area by providing notice to the franchisee. The modified Protected Area will encompass a geographic area immediately surrounding the Premises consisting of a population of 20,000 residents.
If the population within the Protected Area decreases to less than 20,000 residents during the term, Checkersrallys is not obligated to expand or modify the Protected Area to include a larger population. Any modifications to the Protected Area will be reflected in an amendment to Exhibit B of the Franchise Agreement, which will then define the Protected Area under the agreement.
This clause gives Checkersrallys significant flexibility to adjust the Protected Area based on population changes or other factors. For a prospective franchisee, this means the initially agreed-upon Protected Area is not guaranteed to remain constant throughout the term of the franchise agreement. It is important to understand the potential implications of such modifications on the franchisee's business and market.