When Checkersrallys reserves a right or discretion in the agreement, on what basis may Checkersrallys make its decision?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you acknowledge and agree that this Agreement (and the relationship of the parties which arises from this Agreement) grants us the right to make decisions, take actions and/or refrain from taking actions not inconsistent with your explicit rights and obligations hereunder that may affect favorably or adversely your interests. You understand and agree that we may operate and change the System and our business in any manner that is not expressly and specifically prohibited by this Agreement. Whenever we have reserved in this Agreement a right and/or discretion to take or withhold an action, or to grant or decline to grant you a right to take or withhold an action, except as otherwise expressly and specifically provided in this Agreement, we may make our decision or exercise our right and/or discretion on the basis of our judgment of what is in our best interests, including our judgment of what is in the best interests of our franchise network, at the time our decision is made, without regard to: (a) whether other reasonable or even arguably preferable alternative decisions or actions could have been made by us; (b) whether our decision or the action we take promotes our financial or other individual interest; (c) whether our decision or the action we take applies differently to you and one (1) or more other franchisees; or (d) whether our decision or the exercise of our rights is adverse to your individual interests or the individual interests of any other particular franchisees. We will have no liability to you for any such decision or exercise of our rights.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys can make decisions or exercise its rights based on its judgment of what is in its best interests, including the best interests of its franchise network. This applies when Checkersrallys has reserved a right or discretion to take or withhold an action, or to grant or decline to grant a franchisee a right to take or withhold an action.
Checkersrallys's decisions do not have to be based on whether other reasonable alternatives exist, whether the decision promotes Checkersrallys's financial or individual interests, whether the decision applies differently to franchisees, or whether the decision is adverse to a franchisee's individual interests. Checkersrallys will not have liability to the franchisee for any such decision or exercise of its rights.
This clause essentially means that Checkersrallys has broad latitude in making decisions that affect franchisees, even if those decisions seem unfair or negatively impact individual franchisees. Prospective franchisees should carefully consider this clause and understand that Checkersrallys's interests may not always align with their own. It is advisable to seek legal counsel to fully understand the implications of this provision before entering into a franchise agreement with Checkersrallys.