Does Checkersrallys reserve the right to operate or franchise Checkersrallys-branded restaurants anywhere, regardless of location?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
2.03 Our Reservation of Rights. Except as expressly limited by Section 2.02 above, we and our Affiliates (and our respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all rights and discretion with respect to the Marks, the System, the sale of products and services similar or dissimilar to those offered by "Checkers" and "Rally's"-branded restaurants, and the operation or franchising of "Checkers" and "Rally's"-branded restaurants anywhere located or to be located, and may engage in any business activities whatsoever, within or outside the Protected Area, whenever and wherever we desire. Specifically, by way of example and without limitation, we reserve the following rights: (a) to establish and operate, and grant to others the right to operate, "Checkers" and "Rally's"-branded restaurants at locations outside the Protected Area, on such terms and conditions as we deem appropriate (you acknowledge that such "Checkers" and "Rally's"-branded restaurants may be in direct competition with your Franchised Restaurant, without regard to any adverse effects of such activities on your Franchised Restaurant and without any obligation or liability to you); (b) to establish and operate, and grant to others the right to operate, "Checkers" and "Rally's" branded 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) to 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, without limitation, the internet or similar electronic media and supermarkets); (d) to 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 [INSERT BRAND: "Checkers"/"Rally's"] name and mark), pursuant to such terms and conditions as we
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys retains significant rights regarding the operation and franchising of its restaurants. Except as expressly limited within the franchise agreement concerning the franchisee's protected area, Checkersrallys and its affiliates reserve all rights and discretion concerning the Checkersrallys brand, the system, and the sale of similar or dissimilar products. This reservation extends to the operation or franchising of Checkersrallys-branded restaurants, regardless of their location.
This means Checkersrallys has the right to engage in any business activities, whether within or outside a franchisee's protected area, whenever and wherever it desires. Specifically, Checkersrallys can establish and operate, or grant others the right to operate, Checkersrallys-branded restaurants outside the protected area under terms and conditions it deems appropriate. The document explicitly states that these restaurants may directly compete with a franchisee's restaurant, without any obligation or liability to the franchisee for any adverse effects.
Furthermore, Checkersrallys reserves the right to establish and operate Checkersrallys-branded restaurants, or other restaurants using any part of the Checkersrallys system or marks, at non-traditional sites, both within and outside the protected area. They can also sell products or services under the Checkersrallys marks through alternative distribution channels, such as the internet or supermarkets, regardless of location. Checkersrallys also has the right to acquire businesses providing similar or dissimilar products and services and convert them into Checkersrallys-branded restaurants, even within a franchisee's protected area.
As a prospective franchisee, it is crucial to understand that the rights granted are non-exclusive, and there is no right to participate in or benefit from any other business activity Checkersrallys or its affiliates undertake. The franchisee waives all claims related to these activities, highlighting the broad rights Checkersrallys retains to operate and franchise its brand in various locations and through different channels, potentially in direct competition with the franchisee's location.